How to Raise Capital to Fund Your Business Startup

Do you have an innovative business idea but you’re concerned about finance? Are you right now asking questions like, “How do you finance a startup business?” or, “What are the sources of finance for small business start-ups?”

Indeed, you may have heard it said that what you need to start a successful business is a great idea and not money. However, as much as that may be true, an idea will only get you so far. You must have a plan to turn that idea into reality. And this is where money comes into play.

Definitely, you need money to get your great business idea off the ground. It’s just like the old saying, “You need money to make money.”

At the barest minimum you will need money for things like product development, securing your location, procuring inventory and the resources necessary to complete your services. And, after you launch, you’ll need money to expand the business and of course, money to live on until your business become successful!

So, unless you have the money on hand, startup finance is going to be one of the issues you will deal with when you step out to build your own business.

In this article I want to share with you a few ideas on how you can easily find the needed funds for getting your business off the ground.

How to Raise Capital to Fund Your Business Startup

Sources of Finance for Small Business Startups

There are a number of ways that small business startups can source for capital. These include drawing on personal savings, getting loans from friends and family, and angel investors. But not many entrepreneurs have the privilege of getting funding from these sources. For such aspiring entrepreneurs the option open to them is to access funding through more traditional means like borrowing from the banks.

Unfortunately, getting business startup loans from commercial banks is a big challenge. This is because startup businesses are considered the most risky loans that a bank or lender might encounter.

When you approach even the banks that you have done business with before you may be surprised that they are not keen on committing their funds to your great idea.

Why Are Business Startup Loans Risky?

There are number of reasons why start up loans are considered as risky by banks and lenders. But they can all be classified into the four C’s of Credit which are, collateral, capital, capacity, and character.

Every lender expects you to have some form of capital before you are considered credit worthy. But as a new business it is clear that you’re going for the loan because you don’t have such capital

Also, it is expected that you have collateral. But again, as a new business you have little or no collateral. While in most cases you may use your personal assets you can also seek a co-signer with assets to pledge in order to overcome this demand.

Now, capacity is s track record showing that the business has the capacity to generate enough money to pay back the loan. But then as a new venture you don’t have this track record which the banks or lenders can bank on.

The final “C” which is character is primarily about a good credit rating. While this may not necessarily get you a business startup loan, a poor rating will definitely get you turned away quickly.

From the above it means that before you walk into a bank and demand a business loan you’ll need to prepare yourself.

start up loans are considered as risky by banks

Business Startup Finance Made Easy!

From what we have discussed thus far let’s now look at what you can do to ensure that the sourcing of your business startup capital does not in any way hinder the realization of your dreams.

1. Consider Your Needs

Walking into a bank and telling the loan officer about your idea will not get you financed because the loan officer, or any other funder, doesn’t really care about your actual idea. He or she cares about how you plan to implement it and how profitable it will become. Only then, will you be able to talk money.

This is why people write business plans.

Your business plan will detail your idea in a too-much-information format, which works well when you approach potential financers. You will explain your idea in detail, your business structure, marketing plan, how you will make money, future expansion plan, and your finances, both current and future projections.

You must tell people why your idea will be successful and how you will make it successful. You must tell people how it will be profitable. You mustn’t leave any stone unturned, including the monies you will need for any patents and/or trademarks and insurance coverage.

If you aren’t sure what insurance you’ll need, contact an insurance agency.

Business Startup Finance Made Easy!

2. Consider Your Sources

Once you have your plan in place, think about who is best to approach for money. It might be somebody you know, it might be a total stranger, and it might be both.

As we have mentioned earlier there are many ways startups get the funding they need to open their doors. But your first step should be to look in the mirror. How can you finance your business yourself?

The reason why this is important is, most financers will be more likely to lend you money if they see you have invested your own money into your venture first.

This makes sense because if you’ve put your own finances at risk, you’ll be more likely to succeed. And so, if you can put in some of your own money financiers will have more faith in your drive to make your business a success.

You can bootstrap your own assets to get money. Do you own your car? Do you own your home? Do you have savings, credit, and investments that you can turn into cash?

If you answered yes to any of these questions, you might be able to borrow against or cash in some of these assets to get money in your hands to open your business.

Next, look at other funding options. These include your family and friends, business partners, and crowd funders willing to donate money to your opening costs.

Angel investors are another approach to employ. These are wealthy individuals willing to loan you money in return for a stake in your business. This works, because they also offer valuable advice.

Finally, don’t forget to check out the U.S. Small Business Administration and your local, state, and federal government agencies. All are vested in helping small businesses open and grow in their communities, and many offer loans and grants to cover the costs.

Employ any or all of these to get the money you need to start your business.

2. Consider Your Sources for busines funding

Conclusion

While many aspiring entrepreneurs might find business startup financing complicated it shouldn’t really be. So, if you’re right now seeking for funds for your business startup or you hope to do so some time in the nearest future then you don’t have look any further. Use the above information as you guide and you’ll happier for it!

Startup Business Funding: How to Finance Your Startup With Ease!

In our day and time, coming up with business ideas is really not a problem. All around us there are opportunities that make business ideas pop into our minds now and then. However, not many of us take these ideas forward.

The truth really is, coming up with some great idea is not what puts food on the table. An idea will amount to nothing except you package it into something people will be ready pay you for.

Now, you need funds that will help you transform that great idea into a salable product or service. And, this is where many have problems. But you don’t have to give up.

Here are a few tips on how to get that much needed finance for your new startup business.

Startup Business Funding

How to Get Funds to Finance Your New Startup!

1. Draw Up a Plan and Keep Costs Low

Before you start looking for money to finance your startup, you need a solid business plan that outlines the money you’re going to need to get the business off the ground. You need to be realistic about how much money you’ll need but keep your forecasted costs as low as you can.

Remember, you can’t leave anything out when you’re creating your plan. If you do, nobody will take you or your business seriously when it comes to looking for financing. Factor in the cost of creating your products, hiring staff, web design, your premises, insurance and anything else that’s specific to your business.

2. Loans

Some banks are still a little reluctant to take risks and lend to startups. But if you have a good idea and you have a plan to back you up, there’s still a chance of you getting a loan. Credit unions and community banks could be easier to loans from if you’re starting a small business, explore all the options open to you.

Be careful to make sure you can manage the repayments on the loan though. Don’t take out a loan with high-interest rates. Short-term loans are not meant for starting businesses, so don’t be tempted by the offer of quick cash that they provide you with. It’ll only end badly for you.

3. Investors

If your idea is great, you might be able to attract investors. They’ll put money into the business for a share of it in return. There are some downsides to this as it means you have to sacrifice a proportion of your business to someone else, but that’s the tradeoff that you need to weigh up and consider.

So, how do you find an investor? There’s no easy answer to that question. There are some investors that are always on the lookout for new ideas, and you’ll be able to contact them through an agent. But sometimes, the best way to find an investor is to network and make contacts in the industry – it’s the best way to meet influential people.

4. Crowdfunding

Crowdfunding is the new kid on the block in terms of business financing. It’s something that has really exploded over the last 5 years because of new websites. These websites bring together people with business ideas and people who want to see that business succeed, and they can do that by putting their own money into it.

It’s a very democratic way of starting a business because it transfers power into the hands of ordinary people. It’s up to you what you offer people in turn for them putting money forward. You could offer them shares in the business or something simple like a t-shirt of other merchandise products.

Conclusion

Financing your business startup is the first of many hurdles you’ll have to clear as an entrepreneur, but don’t let the scale of the challenge hold you back. Put the above tips to use today and you’ll soon see your ideas fly into life!

Kickstarter Projects: The Secret Recipe to Making Your Campaigns a Success!

Do you have a project that you will want to raise some money for? Are you considering using Kickstarter to get the funds?

Now, if you have not heard of Kickstarter then here’s what Wikipedia have to say about this innovative crowdfunding platform:

“Kickstarter is a global crowdfunding platform based in the United States. The company’s stated mission is to help bring creative projects to life. Kickstarter has reportedly received more than $1.5 billion in pledges from 7.8 million backers to fund 200,000 creative projects, such as films, music, stage shows, comics, journalism, video games, technology and food-related projects.”

Simply put, Kickstarter helps you get the much needed funding for your project, whatever that project is!

It’s really quite simple. As a business owner, you create a product. Then, you ask your community to fund it by donating money towards its completion. You set a target, and the money is only taken from your donors if you hit the target. Every donor gets a reward based on how much they pledged. It’s up to you to come up with the unique rewards and compelling pitch!

Frankly, it’s a great new method to get your startup off the ground!

Over the last few years, there have been some fantastically successful Kickstarter campaigns. One of such is Oculus Rift, the company behind the most anticipated virtual reality headset of all time. After raising $2.5 million, the company was subsequently bought by Facebook for $2bn.

Another big success with Kickstarter is Scrubs actor, Zach Braff who famously funded his latest movie through Kickstarter.

If you’re considering using the platform to raise money, here’s how to get the best from your campaign.

Kickstarter Projects success tips

Long Planning Time

The key to a successful Kickstarter project is laying the groundwork. The campaign itself may only be a month long, but good campaigns have a year of work preceding. This will be spent honing your product and building an audience. You need a community that are eager to help you fund your campaign and a groundswell of buzz. A Kickstarter campaign consultant can help you establish this behind-the-scenes aspect of the launch.

Take it slow, this is the most important part of the campaign.

Explain the Budget in Detail

Once you’ve chosen your target number, create a detailed budget. Tell your donors how exactly you plan to spend their money. People like to know what they’re contributing to. They’ll also appreciate a small justification of the target amount. Showing a detailed breakdown of costs will encourage more donors and larger numbers.

Lots of Small Rewards

From my research, the average donation is $25. You’ll get one or two big donations, and you can tie fantastic rewards to those amounts. However, most of your pledge money will come from smaller donations. Ensure that you have created lots of exciting smaller rewards to keep those numbers coming in.

You’ll have to get creative here. Check out some of the most clever Kickstarter rewards for inspiration.

A Great Video

A great video is perhaps the most valuable asset in your campaign. Videos are the most digestible, and most shared form of content online. If you hope to ‘go viral’ or reach your target audience, you need a good video. It should show off your product at its best. It should intrigue the viewer and convince them to donate towards your cause. It’s often worth collaborating with a professional to get the best results here.

Conclusion

With the right planning and a brilliant product, you could be the next big Kickstarter success story. People love to gather around a cause and help support a great idea. If you’ve executed a successful Kickstarter campaign, I’ll be glad to hear your success story. Feel free to share your tips in the comment section below!

Business Startups: The Secrets To Success You Need To Know!

When you start a new business, there are plenty of things that you need to consider. For example, how many employees do you need? Where should you get your stock? And so forth. While there are thousands of new firms starting up each year, some of them don’t survive that long.

But, what about the ones that do? How do they do it?

Today I will share with you the secrets of success when it comes to setting up a successful and profitable new enterprise. Don’t worry; you can thank me by sharing a link to this page with your friends!

Business startup secrets
Without further ado, here are the essential tips you need to know:

Don’t Be Afraid To Use Secondhand Equipment

When some people start a new business, they assume that everything about it should be new. Including the equipment they use! That might have sounded like a good idea at the time, but the reality is things cost money. Brand new machines and tools cost a lot more than used ones.

If you can get your hands on secondhand equipment, and it works just as well as brand-new products, I recommend you do that instead. Many vendors will sell used items with a long warranty. And they’ll refurbish items before selling them so that they are in “as-new” condition.

Lease Instead Of Buy

Cash flow is usually tight when starting a new business. Sure, some people might have a group of investors that can throw a lot of money towards a new venture. But, that doesn’t mean they don’t want to spend as little as possible in these crucial early stages!

One way to keep more money in your company’s bank account is to lease the things you need instead of buying them outright. For smaller, inexpensive items, there is no issue with buying them. But, when you need machines that cost tens of thousands to buy, it makes more sense to lease them instead.

I know that you don’t own those items. However, on the plus side, your lease will usually entitle you to upgrade to newer models after a few years. And you often get maintenance costs thrown in as part of the deal!

Outsource Instead Of Hiring People Direct

There can be a temptation to hire an army of people to cover various functions in your new business. Sometimes, you have no choice but to do that. A few individuals might start out by doing everything themselves.

Of course, the smarter way to do things is to outsource your requirements. For instance, you can outsource IT solutions so that you have one less thing to worry about. Even if you need a personal assistant, you can hire a “virtual” one that works remotely instead!

There’s nothing wrong with outsourcing. Just make sure you choose service providers that offer an exceptional level of service. After all; you need people you can rely on to get things done.

Conclusion

It is important that you make the right decisions when just starting out. It may interest you to know that the first few years of your business will determine the success or otherwise. Take the wrong step and you will see your dreams tumbling down on you. But if you take these startup secrets to heart and put them into action, success will be guaranteed!

How to Start an Online Business Even With a Bad Credit Rating!

Starting a busines even with bad credit ratingImage source Flickr

When life throws you a curveball, and you lose your job, things can quickly spiral out of control. You may start running up debts and be unable to make repayments on your credit cards or loans.

Now, when this happens, as someone with dignity and self-respect, your best bet is get another source of income fast. This is because you really don’t want to lose your home or even start to go hungry, or do you?

Right now, a lot of people, when they get into trouble like this, turn to the internet for help. So, if you’re looking for a way to generate that much needed income and your credit rating is bad, then an internet business may be the life-saver you’re looking for.

Unfortunately, the trouble with starting any business in this situation is that you now have a poor credit rating. This means you may struggle to find someone to give you a business banking account, and taking customer payments may prove tricky.  Alternatively, you may need to look for a high-risk merchant account to help you take a wider variety of payment options from your customers.

While the above are some options open to you if you don’t want to abandon your dream of starting that online business, here are a couple other ways to get started not minding that bad credit rating:

1. Become a Reseller

Most people start as resellers on the internet. This kind of retail business allows you to trade from the comfort of your own sofa. Using drop shippers, you are able to market and sell other people’s products on your website, and leave it to the suppliers to manage the distribution and shipping. This way, you don’t have to worry about any of the logistics. You won’t need storage for goods, and you won’t need to find a carrier or courier.

This type of business can be quite easy to manage. It is down to you to build a relationship with your customer, and effectively market the products for sale. You need to find the customers through the internet, and provide all the information they require about the items they find interesting.

While you can buy a white label online shop, some people prefer to build up their website from scratch, allowing them to customize the content and layout. For some drop shippers this may not work as you won’t be able to integrate their current pricing or stock levels.

2. Sell Advertising

Another way to start a business and make money online is to sell advertising space. If you can develop a website that attracts a lot of traffic, you will have a better chance of earning an income from click-throughs of ads placed on your site. You can also sell advertising space directly to companies who want to speak directly to your site visitors.

All of this takes time to build up, so may require patience on your part. Success does not happen overnight, so the quicker you start, the faster you should see results.

Closing Thoughts

Earning money from the internet is easier if you are clued-up on how social media and content marketing can be utilized. This requires some ability when it comes to communicating to the people you want to visit your website. The internet is getting bigger every day and the number of users is increasing too. Of course, this is good news for you who want to use the internet as a source of income. The more the better; as this means many more ways to earn! However, you must understand that the internet is also changing, so keeping up with the changes is crucial.

It might not be easy to find money to start a business because of your bad credit rating but you mustn’t allow that to stop you. Use the above ways to get your business started today.

Startup Ideas: 4 Simple Tips to Easily Get Your Startup off The Ground!

Business startup success tipsImage Source

So you’ve decided to start your own business, right? What a brave move!

Deciding to step out into the world in order to make it on your own is definitely a bold step. However, it is unfortunate that so many people who do this fail, not because of any other thing, but mostly because of lack of preparation.

You need to understand the complexities of running your own business if you must make a success of your startup business. There are so many pitfalls that you must avoid. And, note this: there’s no secret formula for success. You just have to do the best you can!

To help you, here are some tried and tested basic tips for starting right. These are sure to help you in the initial process of getting your business startup off the ground.

Helpful Startup Business Ideas

1. Business Plan

The first step in the process of wanting to start any business is going to be to write a business plan. This will act as the blueprint for the future and direction of your business. It will include your business philosophy and end game. It will also detail your projected figures, plans for growth and industry knowledge. You’re going to refer to your business plan a lot over the course of the process. So you need to make sure you’re serious about it. Everything need to be included in the business plan. If you’re not going to do it properly, you shouldn’t bother trying. Your business plan will also be vital in trying to attract funding, financing or partners to your business.

2. Business Loan

A key part of getting your startup business off the ground is going to be applying for a business loan. When you decide to start your own business, it might dawn on you that it’s going to be an expensive venture. You’ll be footing the cost of everything, and this can be a daunting prospect for even wealthy people. Unless you have a lot of money, there’s a good bet you’ll look at getting a business loan. This will allow you to cover the large costs when you first start up your business such as paying for materials, products and staff. In order to secure a business loan, you’ll need an excellent business plan. So make sure you spend a lot of time on it and that you show you can pay back the loan.

3. Outsource

When you first start out with your business money will be tight. You’ll need to be running in the most efficient way possible but trying to spend as little as you can. One of the best ways to do this is visit www.ameridial.com and look into outsourcing. This will allow you to get work done quicker and to a higher standard. It’ll also mean you save money by not having to higher staff full time. You could outsource for a couple of weeks or the duration of a project, and you’ll make a significant saving. Outsourcing could well be something you continue to use throughout the business. But there’s no doubt it will have a benefit when you’re just starting out.

4. Know Your Market

The best way to get your startup off the ground is to know your market. It’s no good starting a business in computer programming if you know nothing about it. You need to know the industry you’re going into. And you need to know it well. You should identify successful competitors in the industry and find out as much as you can about them. It’s also important to identify potential gaps in the market. You need to know what customers want, and then you can adapt your business model to give them what they want.

Conclusion

Getting a business idea off the ground is indeed a great challenge. But you don’t have to stress over it. The internet is filled useful tips and ideas on how you can get your startup off the ground with ease. In this article I have offered you 4 such tips. Put them to practice and you will be better equipped to successfully win with your start up business.

Small Business Funding: How To Apply For Small Business Grant!

How to turn your skills into a profitable business

Small business startup grants are a great way for a small home business entrepreneur to go when the money is not just there. This is because small business startup grant is money that you normally may not have to repay. And if you think that your small home business needs some infusion of capital but do not want to go the way of borrowing then this article is something you should really look into.

Of course the process of applying for a small business grant can be a daunting task. You must understand that small business grants are a much different source of financing for your home business than small business loans. A business grant application requires some details to be successful and when things are not done right it may be difficult to get them. The secret to succeeding with them is to follow the directions. Getting a business grant is going to take a lot of time, but it is worth it if you are starting a new business.

Here’s a website you will want to check out if you’re looking to apply for a small business grant:

http://www.businessownersideacafe.com/business_grants/index.php.

There is a lot of information on small business grants on this site and on this site you can receive up to one thousand dollars for your business ideas. Also on this same website you may want to take a look at this page:

http://www.businessownersideacafe.com/business_grants/grants_advice.html

which will give you some information as far as what you should look for when trying to get a grant. This is really useful information. Besides, on this page, there is a calculator that can help you determine how much money you may need when financing your small business. This can be very good because most people will put together a business plan but have no idea of how much they may possibly need.

If you want some federal government small business grant then note that the Small Business Administration currently does not give away any grant money directly. If grant money is to be given, it is passed along through intermediaries such as lending institutions.

However some of the reasons for US grants are: small business start-ups, preserving historic monuments, continuing education, and art. These grants are given every year. The unfortunate thing is that for every million grants that are applied for each year only a few hundred are actually granted. Some of these are free grants while others are more like loans which you?re required to repay with interest.

Tips For Applying For A Small Business Grant

1. Know what type of grant you actually need. The Small Business Association (SBA) or Small Business Development Center (SBDC) is great help here. Without proper research to know your funding needs your grant application may be rejected.

2. Before sending in your application make sure you meet the grant requirements.

3. A grant proposal letter and a business plan could be of great help as this can help you stand out among the crowd. Preparing this demonstrates that you know much about the business.

4. If you think you do not have enough experience to go it on your own, it may be best to bring in outside experts to help. An accountant or consultant can add credibility to your application process.

5. Keep in touch. Make regular contact with the grant office in a professional, non-intrusive manner.
Once your application, proposal and business plan are all complete and submitted the next step is just being patient. In some cases, it can take up to twelve months for approval.

This article may not have touched on all the points you need in your search for more sources of funding for your online businesses. Of course I couldn’t have done that in such a small space as this. There are of course many different forms of funding and financing for your business other than grants so do not think that this is your only option.

Wishing you the best of luck as you search for the perfect grant for your small business.

How to Start a Small Business on a Budget

Quick guide to starting a business on a budget

Can you start a business on a budget that is less than $1000 in our today’s economy? Of course, that may seem impracticable but it is not beyond the realm of possibility.  The truth is, many have successfully built flourishing businesses starting on a shoestring budget.

In this post I want to highlight a few tips on how anyone starting as low as $1000 can creatively build a business from scratch.

1. Your Choice of Business

Starting a small business on a budget or $1000 or less will greatly depend on the type of business you are going into. The fact is that there are some businesses that demand a whole lot of capital. If you are going into a business that requires thousands of dollars to start then jumping in when you don’t have the capital will amount to digging your own grave.

So, if you’re considering starting a business on a budget you definitely need to choose the right type of business.

2. Have a Strategic Plan

Starting a business on a shoestring budget is indeed a tasking Endeavour. Every ounce of your mental and physical power will be needed to make things succeed. To avoid being a wreck along the way you will need to have a plan that will not only allow you to work smart but also ensure that the money start flowing in  as soon as possible. If you are offering a service you must make sure that clients settle your bills as soon as you complete your job.

3. Go Lean

There is always the tendency to have a big office when you are starting a business. Of course, this is good as you will want to look professional and successful to potential clients. However, if you want to make a success of your business on a shoestring budget then you must avoid that temptation. You can however start from the comfort of your home but then design some good looking and professional business cards. Use your home phone as your business phone but ensure that you present a professional appearance when communicating with clients and customers. To ensure that you do not fall into situation where you forget what you are doing, set up a separate corner in the room for your business dealings. This way, you will always beware that you are in business.

Related Reading: How to make money online on a shoestring budget!

4. Use No-Cost Advertising

Advertising your business is a must but you don’t have to spend hundreds of dollars to do so. Seek out free advertising mediums for your business. Use online community boards, free advertising websites and possibly personally deliver business fliers in your community, if your business is targeted at your locality.

5. Collaborate

Whatever your target market there are other no-competing businesses you can partner with to exchange leads. You need to be creative in this. Look at the type of business you are running and consider other non-competing business that share similar customer bases with yours. Reach out to them and strike some form of partnership so you can directly refer customers or out-rightly exchange business leads

6. Get a Website/Blog

A website is one of the cost-effective ways of marketing your small business in today’s virtual economy. You can get a domain name and reliable webhosting anything from $10 – $30. If you lack the competence to setup your website, there are places online that you can get someone to do it for a very small fee. Most importantly, do not forget to add a blog to your website. This will allow you to use content marketing to drive consistent traffic with ease. Check this offer to see how you can have your blog set up for your for free.

7. Maintain a Positive Mindset

Attitude is everything. This is something that many take for granted. The fact that you are starting on a low budget can bring up a lot of challenges. These challenges could be so daunting that sometimes you just want to throw in the trowel. The only antidote that will help you in times like this is your mindset. Being able to positively motivate yourself no matter the situation will help you keep moving despite the challenges.

Conclusion

Going into business with enough money to drive your ambition is really great but where you have the right business idea but you are short of the cash, you can always start on a budget. If you’re thinking of taking this route, the above tips will definitely come handy. Though you may be starting on a low budget never lose sight of the fact that you will be trading your time for this shortage in capital. So, true is, your time would be the capital you will be investing. So what is your time worth to you? The value you put on your time will determine how much work you will be ready to make your shoestring startup succeed!