One of the main reasons small businesses fail is a lack of capital. Your dreams can easily outweigh your ability to raise money if you don’t plan far enough in advance.
Business funding for startups isn’t rocket science though. There are many practical ways to raise money that won’t cause you to have perfect credit.
Take a look at these 5 options to consider when looking for business funding for startups.
1. Time is On Your Side
One of the biggest forms of sabotage when starting a new business is rushing. You convince yourself that the opportunity will disappear if you don’t act on it before a certain time.
This is a myth. There’s no such thing as a window of opportunity closing.
You can perform at the level you can perform at using the resources you currently have. Hypothetical resources don’t count.
Be patient with yourself as you navigate the world of gathering resources so you can perform at your optimal level when the time comes.
2. How Long Do You Need?
Once you get out of the habit of rushing through the process of starting your business you can think realistically about how long you need to repay any debt. Do you have a sound exit strategy for your business?
How soon do you think it’ll take to profit? Ask yourself these questions so you have a strong grip on the type of funding that makes sense for your start up.
Choose a loan term that’s too long or too short could interfere with your ability to get more money when you need it. The goal is ease of repayment not speed or the amount of funding you receive.
3. Bootstrapping is Timeless
One timeless way to get business funding for startups is bootstrapping. Bootstrapping involves using your own money to start the business by saving or earning additional income.
One way to earn additional income is to get a part time gig. In today’s gig economy, there are countless ways to start businesses that won’t require you to go back to school or work at weird hours.
There’s flexibility in earning that go beyond traditional part time employment. Use this trend in our economy to boost yourself financially so you won’t have to worry about loan terms during your first couple of years.
4. Create a Strong Budget
What are your financial goals in the first two years of your business? The answer shouldn’t involve profit.
Most small businesses won’t profit for the first couple of years. If you’re expecting profit to float your business, you’re missing a prime opportunity to really understand what it takes to manage the operations of a company.
Create a strong budget that accounts for each day of the business for the first 600 days. How often do you buy office supplies?
How frequently will you call on new clients in hopes of getting a deal? How many employees do you need to maintain a professional storefront?
5. Explore Business Funding for Startups
Look into business funding for startups across the web. There are small business loans that offer flexible repayment terms as long as you have a decent financial history.
You can read more here to compare the various options and the funding limits.
Business Funding Options
Your main two sources of business funding for startups will come from yourself and a lender. Whether that lender is a traditional bank or online lender, they’ll want to back a strong manager who has done their due diligence before leaping into a new venture.
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