For most people or maybe over 90% of people funding is the key as in what have kept them from moving forward. Yes, I will say funding is the oxygen of any project, startup or business, but I will add your resolve to execute or venture in it is very important in getting funding.
Funds keep a project or business going, no matter how resolved or determined you are the project will come to a halt if there is no funds to sustain it, for example paying the team, purchasing or procuring the project resources or items.
Don’t run a project or business without planning for the fundING.
So I have outlined below some clever ways to raise funding for your project or business or that start-up.
- Personal Savings: people want to see you do something and show how committed you are, so it is better to at least show some level of commitment by saving towards your project. Before you start that project or business be sure you have some funds to run it for at least some few months. Don’t go around asking people for funds when you have not done anything. if you can’t save or commit your money to the project why do you want someone else to commit and risk their funds on you. You must be able to demonstrate how you have been able to manage your project or business in the first few months of the business, before someone can consider it worth investing in. In savings you must clearly set goals of how much you want to save and keep to it. It might be cutting out on some expenses that are not necessary and channel them to savings.
- Family and Friends: The easiest people to convince first for any project or business is family and friends but with a caveat, most people want their family or friends to invest in their business or project as a gift to them. How can you be asking someone to gift your money to start a business? Most people fail to get their family to support them because they feel their family to support them is their right and family members or friends don’t have a choice. The smart thing to do is to sell to them an investment opportunity and how their funds are secured and the return on their investment. Don’t let them feel as if they are losing their money, take them seriously and show them the benefits. Some family members have the capacity to be your partners and co-founders in that business, project or start-ups.
- Partnership: For bigger projects or businesses, your savings might not even be enough to start, you might need to consider looking for a partner who share the same ideals with you and who will be able to invest the funds you need to start up the business, just know that the co-founder or the partner might have the same control as you in the business and there might be need to have a buy out clause in the cause of the business, but for me partnership is one of the easiest way to getting the right funding for bigger projects, businesses or initiatives.
- Crowdfunding: it sounds new but its popularity has been rising globally and a lot of projects, businesses and start-ups have been funded through this means and funds raised are running in billions of dollars all around the world. The interesting things about crowdfunding is there are lots of benefits, depending on the type of project or business you are running or want to start. But you need to understand how most of the crowdfunding platforms works. Some of the most popular crowdfunding platforms include: GoFundMe, Indiegogo, Kickstarter to know more about crowdfunding you can enrol on one of my course here Understanding Crowdfunding. In crowdfunding you have to present the idea to people for what you want them to funds and people can then donate, from all around the world towards that project or invest in it even before your start.
- Bank Loan: Another way to raise funds is through bank loans but remember banks will also want security for their money, and the truth is their interest rates are not smiling and most times you must get someone to guarantee. These days we have a lot of credit companies and micro finance banks that are willing to give small funds for businesses and projects with minimal documentation compared to the big banks. Always ensure you have tried every other avenue I mentioned above before you approach a bank, the bank loans are one of the most expensive source of funds for business or projects. One of the easiest way to get a bank loan is to build your transaction history overtime. Look for a bank you think their rates are good and you will like to get a loan from and begin building your history. Its near impossible to get a loan from a bank without a transaction or credit history, the banks want to see what you have done over a period and your cash flow.
- Angel investors: These are mostly entrepreneurs who are looking for start-ups to invest their money. They are interested in viable ideas and don’t mind investing huge sums of money if they are convinced it’s a good one. Some big companies around the world received their first form of funding from angel investors. Including Facebook, Google, Twitter, Skype among others. If you watch shark tank a lot the American Business TV show you will see that some of the benefits of Angel Investors is they provide guidance and connection in the business world that will help your start-up or business thrive beyond what only you can achieve.
We also have other source of funding that are more complex and not really in my own opinion totally good option like venture capitalist if you are a start-up.
In sourcing for funds, always seeks for the easiest, cheapest and the one with the most value that will not put you the founder in a tight corner or kick you out of the business.
do you know other sources of income and maybe your experience, you can drop it in the comment section.
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To your success