There are a wide variety of challenges to consider when it comes to launching your new business, but the most common issue is always going to be money. No matter what your business focus is going to be, chances are that you are going to need to spend money before you start making money, and whether that’s for website designs, supplies, or staff wages, that money is essential. Sourcing the money that you need can be difficult, and depending on your circumstances could be a stumbling block that seems insurmountable. The good news is that there are a range of options that you may not have considered, and if you get your planning right, you could find a viable source of cash that will see your business last through until you start making sales. If you’re struggling to raise money for your business launch, here are the top five ways that are worth considering.
The rise of crowdfunding
In the digital age, is there a better way to raise money for your business than through a crowdfunder? These have become one of the most common ways for people to raise much-needed funds, and businesses are no different. There are several high-profile crowdfunding platforms to choose from in 2018, but there are different necessities for each one. That’s why you are going to need to do your research. Running a successful crowdfunding campaign is not easy. It will take a strategic approach and a plan that can adapt to different ongoing challenges. The good thing about crowdfunding is that there is minimal risk. Apart from the time it takes to set the campaign up and market it well, you are making no financial commitment until you reach your determined target.
Pros and cons of a personal loan
As a source of business funding, many people still use the route of the personal loan. This can be a fast and cheap way of raising the money that you need, and most personal loans will be interest-free. That’s because borrowing from friends or family will often see you getting a good deal, although there are some inherent risks to consider before you start asking. First of all, if you borrow a substantial amount from one or several sources and your business fails, then you run the risk of damaging the relationships that you have, and those around you may not take kindly to you losing all of their money. Always consider a personal loan carefully, and never ask to borrow from someone who cannot afford the loss.
The traditional bank loan
The most traditional way of raising money for a business launch is via a bank loan. Having a chat with the bank manager and securing a bank loan is almost the go-to option for many people that haven’t realized that there are alternative options available. However, bank loans can be useful because they give you an air of respectability when it comes to further growth and self-promotion. If a bank recognizes the worth of your business idea, then it must have something going for it. Before you secure a bank loan, you are going to need a substantial business plan prepared, because no bank manager is going to approve a loan without one. Your business plan is an essential factor regardless of how you’re sourcing your funding, but banks especially will place a lot of weight on one.
Taking control with a private loan
If you really want to take control of your finances, then a private loan may be the best option for you. Bank loans can be a challenge to secure, and personal loans can damage relationships, but a private loan is very different. They are ideal for those that are hoping to find a more flexible repayment plan which will help during the initial period of business management. Private loans can also be secured for those entrepreneurs who have been lumbered with a bad credit score for whatever reason. Look for options like Avant who can offer a range of business loans from $2,000 to $35,000. Remember that private loans may give you greater control of your repayments, but they will also come with higher interest rates than more traditional loan types, so you will need to take that into consideration when making your application.
The basic approach of bootstrapping
Of course, you could always try and circumvent the need for any cash injections by taking the modern approach that is bootstrapping. This is simply launching your business without any capital whatsoever and no external help. There are some clear advantages to this approach, but it can be a challenge. You will learn a lot more about the details of running your business when you’re watching every cent and dollar, and you’ll also end up without any debts to pay back from your potential profits. If you are considering the bootstrap approach it’s a good idea to have some cash available for unexpected bills or expenditures, and using your personal bank balance is just another reason why you will take much greater care over your spending. Thanks to the ubiquity of resources available online, the concept of bootstrapping has become much more viable, because digital tools are freely available and can help you to make the most of however limited your start-up funds are.
Launching a new business is challenging, but the rewards can make the hard work worth it. With the right planning and preparation, and having a firm idea of the risks, you can reduce the stresses and make it far more likely that your business will succeed. Never underestimate the importance of the financial risks, and make efforts to understand all of the options available to you when it comes to raising your much-needed capital. Do this, and you’ll be in a much better position to run your business in the right way. Make your business launch the foundation of your business strategy and your entrepreneurial venture will stand a much greater chance of success.