One of the crucial questions inspiring entrepreneurs ask is where they get the money from to finance their business ideas. There are many different ways to finance business setups, and if you are part of the inspiring entrepreneur squad, you are here at the right place.
While you can immensely benefit from personal loans, here are three means to finance your startup:
Invest Your Own Money
According to research and statistics, nearly 70% of startup financing is directly obtained from the bank accounts and pockets of the potential business owner. That said, don’t listen to someone telling you not to invest your own money into your business venture.
You ought to understand one simple fact: you cannot initiate your business setup without investing your own money. No one will lend you any money unless you put your own money on the table. That said, sometimes, an easy way to get money is by selling things that you can benefit from.
Find an Investor
If you don’t have items that can be sold, get engaged with angel investors that are professional people who own money and have their careers and businesses. Usually, professional investors keep looking for investment opportunities that would generate a high ROI.
By making numerous small investments, the angel investors thrive at rendering enormous benefits. While the investors have preferences about the niches they like to invest in, they also carry extensive knowledge of different business industries.
This aspect makes them more than simple investors as they can also guide your business, product development, sales, marketing campaigns, etc. However, many investors want to rake a certain percentage of your business. And if you fail to meet their expectations, they might stop the investments or take over your business completely.
Ask Your Loved Ones
When it comes to asking your loved ones about financial loans, we are referring to your friends and family. Sometimes, our loved ones are financially strong enough to lend us money solely because they love us and care about us.
It might be a terrific idea to get this kind of “love money” from family or friends; however, make sure to keep a written record of all financial transactions. Ensure that you have vivid and clear evidence of how much your family and friends are putting in and how much they will earn/ get out of it.
Play fair. Just because you are dealing with your loved ones and not with a bank, it doesn’t mean that you start taking the money for granted. If you fail to return their money within a given deadline, you might lose more than just financially.
While newbie entrepreneurs have various options to choose from, it is recommended to conduct intensive research on one’s business ideas before taking out financial loans. For instance, one should know about a potential target audience, the limitations of one’s business, interest rates, borrowing limits, etc., before choosing which loans one wants to take for the startup finances.