Where to get money for starting a business
So, you got the idea to open your own business. Sometimes people mature by this for years, and sometimes this desire catches up suddenly, and you can no longer stop thinking about it.
If you have available funds, or a source of stable high income, then you most likely will not have problems with investments in starting a business. But what if there is no money at all, and the desire to start a business is great? Where to get money for business? Options for further action there are several.
But, first of all, you need to make a business plan (you can see examples of various business plans on our website). It’s not enough just to estimate how much money you need to invest in a business. You must clearly define what and how much financial resources you need to invest in order for the business to work. And after that, consider options for raising money for business development. We will tell about these options.
1. Get a bank loan.
Perhaps this method of financing a business in the absence of its own funds comes to mind first. However, getting a bank loan for business development is not so easy, although it is quite possible. Banks are often afraid to give a loan just for starting a business, because there is never any guarantee that the business will not burn. But for firms that are already functioning for a year or two, and very successfully, loans are given more readily.
Be prepared for the fact that at the start of a business the bank will agree to give you a very small loan amount, and then only for a short time. Think carefully about whether you can earn the necessary amount from your business in a few months and return the money on time. Also consider that the answer from the bank may have to wait a long time – the bank will have to think for a rather long time whether your idea of realization is worthy or not.
In general, obtaining a loan for opening and developing a business is rather difficult and problematic. But still, this option can be considered.
2. Find investors.
The option of attracting investors who agree to sponsor your project is quite promising. You can also try to find rich like-minded people who will become your business partners and invest a substantial amount in its opening.
However, in order to achieve the desired in this matter, your business idea must be interesting, unusual, attractive and very promising. But this is not enough: you should also be able to present it beautifully, tell about it so that the hands of investors reach for the wallet and give you the amount you need. In another case, people who could potentially become your partners will simply refuse to cooperate with you, explaining that they are not interested in an idea or have little prospects. If you chose this option of attracting finance for your business, the ability to convince will be useful to you like nothing else.
Also it should be understood that the profit will have to share with a partner. It is recommended to immediately determine what percentage you will receive, and what – your partner. And just in case, document everything.
3. Use leasing.
This option is suitable for those who need to purchase expensive equipment. Leasing is, in essence, the same loan, only it is issued to legal entities. Now there are a lot of leasing companies, and they are ready to lease almost any equipment.
The scheme of actions is simple: you apply to a leasing company, they provide you with the equipment you need for a long-term lease, you use it and pay interest. Subsequently, you have the right to purchase the equipment in its full ownership.
The disadvantage of this way of solving your financial problems is that again you have to strain and use the maximum of your communication skills to convince the leasing company to cooperate with you.
4. Win a grant.
There are various associations of entrepreneurs who periodically hold competitions for the best business idea, the winners of which receive money as a prize for starting a business. This practice is actively supported by the state, since it also does not remain indifferent to the development of small business.
Quite a few entrepreneurs usually participate in such contests, and the competition among them is very high. In order to stand out against the general background, you need to come up with a really fresh and promising idea. Winning a grant competition is not easy, but for a goal-oriented person, nothing is impossible.
Even if your idea at first glance does not carry anything unusual, but you firmly believe in it – you should take part in the competition. And what if it is you who will become the grant holder and will be able to realize your dream?