Creating a new business is exciting and terrifying at the same time. In a way, a business of your own can signify freedom and success. The freedom of owning a business doesn’t mean freedom from hard work — far from it. Instead, owning your own business allows you freedom from glass ceilings, from doing the hard work while an incompetent supervisor takes all the credit, or from feeling like you’re a hamster stuck in a wheel. The success comes because it feels different when you own your own business. You may take home less money than someone who works for another company, but you’re a business owner now.
One of the biggest barriers for many people to start their own business is in funding it. There are countless ways to finance a new business, but it’s hard to know where to start. There is always a risk involved in a start-up and investors want to know that not only do you have a solid idea and plan, but that you have the people who can help make it happen. Don’t let money stand between you and your business dreams. Here are some creative ways to get funding so you can get started on your path to success.
If you’re not willing to invest your own money, then it may not be a worthwhile endeavor. Be willing to put some skin in the game when it comes to your business. While you may not have a ton to offer, if you can get an LLC and other things started with your own money it’ll give you a leg up in the future for finding other investors and opportunities.
Business Credit Card
Once you start your business structure, you can often get a credit card with a small limit for your business. This card can help you start establishing business credit to help you get funding later on. You’ll need an EIN, documents from your state about your business and sometimes even a business plan in hand. A business credit card means that you won’t be personally liable should the business go under. This helps protect your personal credit against derogatory marks.
Use something like Kickstarter or GoFundMe and get lots of people excited about your new business idea. Crowdfunding helps you connect with your potential target audience before you launch your first product. It also helps them get rewarded for their contributions and gives them access to exclusive content first.
There are grants for nearly every kind of business. Whether you want to start a small farm, launch a new piece of technology, or even launch a new home décor product line, there are grants to help. You might look for opportunities for women in business for example. There are plenty of business grants out there if you fit the criteria.
Be prepared with a detailed business plan if you want to go this direction. You’ll also need to prepare your pitch and presentation. Banks still offer business loans to those with great ideas and who can prove the viability of their idea. They are very competitive though and require you to do a lot of preliminary work. You don’t want to go in without a plan.
Friends and Family
Ask your friends and family if they want to get involved with your business. You never know who would be willing to invest or lend you some money to help get your business off the ground. Make it official with legal contracts and payment plans so they feel like they are truly part of your business.
Kiva is one of many online portals to small business microloans. Whether you need just $500 to buy a piece of equipment or you need $2000 for something more substantial, these microloans can help you get what you need to start your business. If you’re a handyman looking to get a specific tool or you’re a seamstress who needs a better sewing machine, microlending is a great option.
Small Business Contests
Have you seen shows like Shark Tank and wondered what you would need to do to get on the show? Interestingly enough, investors all over the country offer small business contests to find new businesses to invest in. You don’t need to get all the way to the sharks or be on TV, but you can still get out in front of investors who may love your idea enough to say yes and make an offer you can’t refuse.
Get a Business Partner
Often a business partner can bring much-needed funding to help your idea come to life. It’s important to consider the partnership wisely and to create a solid plan to protect both parties. You want to ensure no one steals your idea and runs off with it.