If there’s one thing an entrepreneur cannot do without, it must be working capital, as money is what transforms a business concept into reality. Without working capital, your business idea will remain just that, an idea. And beyond that, without sufficient capital, your company will eventually overextend and there will be no coming back with fresh financing. With that in mind, here are a few ideas on how you can raise the necessary capital to get your business plan off the ground.
- Property Equity – If you have equity in your home, then why not unlock that? Talk to a finance company about a re-mortgage and you might be surprised at how easy it is to get that much-needed funding. Sometimes this is known as bootstrapping, which is accessing all the capital you can by leveraging credit limits, calling in debts, and selling property. This is probably the cheapest way to secure the funds you need to start your new venture and do shop around, as interest rates vary. Failing that, you could apply for a secured loan, using your real estate as security and by talking to the online lender, you can find out more about a secured business start-up loan.
- Crowdfunding – This is a relatively new way to raise business capital; all you do is register with the website and present your project and if investors like what they see, they will pledge an amount. Of course, you really do need to do your homework in order to attract investors and don’t be surprised if there are a few questions waiting to be answered the next time you login.
- Online Lenders – The one good thing about the online lender is they give you an almost instant answer, based on the information you give, and they are able to do this largely thanks to commercial credit and lending software, which presents them with the information they need automatically. It is not unheard of to receive the funds on the same day you make the loan application and you can’t get much quicker than that!
- Approaching Private Investors – If you are very confident about your package, you could put together a digital presentation and approach private investors, although you need to be 100% sure that your business plan addresses all the potential issues. Expect to have your plan dissected by investors, but if it stands up to their inspection, you could be onto a winner. If you are looking for some inspiration, check out these entrepreneurs and the difficulties they faced on the path to success.
- Sleeping Partner – If you can find someone who has money and they are prepared to partner up with you, this could be the answer to your capital needs. Many successful businesses began with one entrepreneur who partnered up with a money person and the rest is history. As one famous entrepreneur once said, “If you have the know-how, find someone who has the money and bingo!” Click here for Australian government advice about setting up your own business.
- Grants – One of the great untapped resources in western economies is grant money. Governments and organizations have an enormous amount of grant money available for various, and sometimes obscure things. Very often, because there is little promotion about the grants, this money is not used. Very often a government will be awarded a lump some of money for some political concern, and the only way they can think to provide it to the people is in the form of a grant. However, the only way to find about these hidden bonanzas is through research. The best part of the grant money is that it is free money, it does not have to be repaid. It is certainly worth your time to investigate it.
- Corporate sponsorship – Depending on the field your business idea is in. Your best opportunity for sourcing capital might be a corporate sponsor. The people who are most likely to see the merits of your ideas are likely to be people you have either an understanding of the market you are involved with, or, Your idea reflects one of the areas of interest that the corporation would like to be identified with. Corporations put billions of dollars into promotions every year, and they are constantly searching for new opportunities to enhance, both their market share, and the public image.
When you are looking to finance a business idea, be aggressive and leave no stone unturned. You will encounter many obstacles along the way, but business I about solving problems. The first of which is how to get started. The road to success is long and at times, very steep, but determination is the key. When putting your business plan together, try to see things from the investor’s perspective and that will help you to present a strong case why your business is destined for success.