In a previous post on The Trent, 6 things Nigerian startups are worried about was discussed. One of the most common things startups are constantly concerned about is capital. To turn an idea into a revenue-generating business, founders need to secure enough funding to get started.
There are several sources of funding to tap into if you’re starting a new business. In this article, we are going to take a look at the different ways you can fund your next startup and get your business idea off the ground quickly.
Self-funding your business must always be the first avenue you explore when starting a new company. There are a lot of advantages to gain when you fund the business yourself. For starters, you maintain complete control over the business and its operations.
You also have the freedom to pace the business’s growth accordingly. There are no tight deadlines to meet, or complicated objectives to reach, which means the business can grow more naturally. This often results in more sustainable growth too.
A lot of successful entrepreneurs started their journey by funding their own company. Sam Ovens, a renowned business consultant and founder of consulting.com, started his firm with $0 capital. The company now generates more than $100,000 per day by licensing training programs.
Partnership is the second method to look into if you’re starting a new business. You are giving away a portion of the company to allow partners to get involved, but this too can bring a number of benefits that help your business grow exponentially.
For starters, you can choose partners who are better in managing a business or contribute other special skills and experience to the table. You can then focus on product development or other aspects of the business.
You can also find a silent partner (or several of them) and still be the leading figure in the company. Naturally, every major business decision must be made with the approval of all partners when this is the kind of funding you use.
Using loans to finance an entirely new business isn’t the best idea, but it is an option worth considering nonetheless. You need to be extra careful when choosing which loan to use. There are challenges to face as well; banks don’t always want to approve loans to a new company unless suitable collateral is put in place.
Using a loan to finance a new business, however, is considered the simplest of all financing options. You have a fixed monthly repayment amount and a predetermined cost to deal with. These cost factors allow you to be more meticulous when managing your business finances.
Loans can also be very affordable. Thanks to the current economy, it is not difficult to find low-interest loan that can help get your business idea off the ground. After securing the loan, you can focus your energy on keeping the business running well while maintaining control over the startup.
One last financing option you must not neglect when starting a new business is crowdfunding. Thanks to websites such as Kickstarter, you can now sell your product concepts or ideas directly to customers. Backers – the customers themselves – can then pledge a certain amount of money to get the product made and marketed.
You don’t have to sell products directly either. A lot of startups are offering merchandise and other items in exchange for the financial support. When the product is eventually made, the same backers can choose to buy it at a special price or at the full market price depending on the terms of your crowdfunding campaign.
Securing sufficient funding is a daunting task, but it is a task that can be tackled easily now that there are so many options to utilise. Take a closer look at these funding alternatives and choose one that suits your business and business idea perfectly.