One of the most pressing concerns of people who want to start a small business is how to finance it. My advice is to first create a business plan where you outline exactly how much you’ll need to launch the business (it might be less than you think) and then explore some creative ways to finance your small business. Here are a few ideas to help get your wheels turning.
The Friends and Family Plan
If you have a supportive family and friends who want to see you succeed, consider talking to them about your business idea. Once you have your plan and know exactly how much you need, you can divide the cost amongst yourself and the number of people you know who might want to support you in this venture. So for instance, if you need $1,500 to get started and have 4 family members (plus you makes 5), you’re appealing to them for $300 each.
Crowdsource Your Butt Off
Another popular and creative method of raising money for a new business idea is to crowdsource or crowdfund it. Sites like GoFundMe.com and Kickstarter offer this service – it’s up to you to provide complete information about your business idea, make an appeal that will grab attention and promote it via social media. You have to be serious, thorough and very motivated for this creative business fundraising method to work.
Community Grants – CDFIs
Some municipalities offer special programs to local residents who want to start a small business but need funding. A lot of people don’t know about these programs or don’t believe they will qualify, but this is definitely worth looking into. Their requirements for loans are often more relaxed than going to a back. They are often run by CDFI groups (Community Development Financial Institutions). Some community programs help you to save for your business and then provide matching funds if you complete a series of classes and reach your savings goal. Go to your local Chamber of Commerce and ask around town.
Before you go to the bank or pull out your credit cards to pay the initial investment for your idea, investigate these creative ways to finance your small business.
Starting up a small business, even if it's just on the side, is no longer an option -- it's a necessity. Why? Because everyone needs an additional source of income in our new economy. Click here to sign up for educational and motivational posts to keep you on track.