If you conceive a business idea and ascertain its viability, the next thing you should do is to secure funding to execute it.
However, like all things that involve money, getting funding for your business, especially if it is your first one, is not easy. Fortunately, there are certain steps you can take to increase your chances.
We talk about some of these steps below.
Join a start-up incubator
Entrepreneurial or start-up incubators are generally non-profit organizations that assist new business owners with setting up their businesses. They help to:
- polish your business idea
- draft your business plans
- improve on the products or services you intend to offer
- identify potential intellectual property issues
- provide network opportunities with other startups
- connect you to potential funding and angel investors
Additionally, they provide a mix of expertise, creative collaboration, friendship, mentorship, and access to business funding.
Create a detailed business plan
Before you can get business funding, you should do your research and determine everything you need to start your business. This includes the amount of funding required, what the funding will go towards, and the projected income within a specified period.
For this reason, you need to create a full business plan with market data and financial forecasts.
Test the market
You need to test the market and attempt to grow revenue before you attempt to put in huge lumps of money. This will provide you with an experience of the market, enabling you to learn what to expect from the market. It will also give you an insight into how to navigate the market.
Use crowdfunding platforms
Most first-time business owners have one thing in common: they lack cash flow.
Luckily, you can raise capital through crowdfunding websites. This method gives your business more publicity through word-of-mouth advertisement. It also increases your chances of raking in funds for your business.
Conduct a pre-sale campaign
You may get more visibility for using other people’s money for your business funding. However, creating operational funding with actual sales helps you rely less on others while proving market interest.
For this reason, launch a pre-sale campaign of your products or services to generate income.
Build your savings
The media is overrun with messages advising you to focus on your passion and live your dreams, which may spur you to quit your job early.
While it is great to focus on your startup, you need to critically assess your situation and establish a few concepts before you quit your job.
You can do this by saving aggressively to put a few concepts together. Hence, you may need to hold off on quitting your job prematurely.
Leverage credit
As a first-time business owner, finding the right funding for your business can be challenging.
Leveraging credit is an effective way of raising capital. Hence, look out for financial institutions providing low-interest loans and zero-interest credit cards as they are great business funding sources for beginners.
Build a finance pipeline
Investors who are interested in your business will want to see your finance pipeline. Even if you haven’t closed any deal, a clear database will provide a comprehensive pipeline.
The amount you’ve invested in your business will inform investors that you believe in your idea and are willing to put in your money as well.
Personal finance your first business
Using personal finance for your business gives you full ownership of the venture.
This method shows that you are a disciplined and accountable owner. It also shows that you have the right motivation to create true value and provide services that will sustain your company’s growth.
Finally, we recommend you avoid business funding from a formal source. Instead, source for business funding from family and friends and take low-interest loans. This will ensure there is less pressure on you. As a result, you will be able to focus more on your business and how to ensure it succeeds.