Are you looking to start a business of your own? Do you have an Idea which can make you a successful business? Do you know how to reach to your potential customers? Do you have a revenue generation plan for your business?
If Yes is the answer to all these questions then it means you are following the same dream like millions is following and it is called a "startup" dream. You could have a million dollar Idea which can build a million dollar company but before all that glamorous stuff, the most important question arises that how you will get money to start your business. We all know that it is not easy to get the money from an Investor and nobody is waiting to risk his money to you just because you have a new and exciting Idea for business.
There are various creative options available for you to get a funding for your business. But you should cross-check every possible option and be completely sure before zeroing the most suitable option because it could make or break your startup within no time.
For a first time investor, it becomes quite harder because a professional Investor always checks your experience and expertise in the particular field they expect to own a portion of your startup through equity and control the money that they provide. Here are some most viable options that a first-time startup founder can choose for his business funding-
1. A bank loan-
Yes. You can apply to a bank for a loan for your business. But you must have a clean credit history and some assets that you are willing to put as guarantee in case the business go downwards.
There is a loan program called S.B.A (Small Business Administration) in the United States for new startup business owners who want to get a funding for their businesses. The SBA provide free money, government grants, and no-interest loans. But the SBA does not directly provide the funds to you and you will need to get the help of the loan officer at your local bank, a credit union or a nonprofit financial intermediatory to access such programs. In the last year itself, there are around $50 million dollars given to various small businesses per day through SBA programs.
2. Trade skill, services or equity for startup-
It is often called bartering means you provide a person your services or some part of equity for his help. This help could be anything like monetary, office space, IT infrastructure or financial help when they need. For example, a person has a bigger office and you want a small space for your startup so you can offer that you will handle their computers, network, and other IT related stuff.
3. Contact venture capitalist investors-
There are various private investors who put their money for qualified startups ready to take off. Generally, they can that whether you have a proven model and revenue generation system or not. They usually look for bigger opportunities and provide millions or dollars and also a support team for you.
4. Apply to angel-investor groups-
Angel investors are those rich entrepreneurs who are looking for some talented guys which a unique business Idea. Many metropolitan cities have such group of angel investors who are willing to provide millions of dollars to young and qualified startups. You can use such platform which is compatible with your business plan and pitches your Idea to them.
5. Join a crowdfunding campaign-
The crowdfunding campaign is a kind of fundraising option for new business entrepreneurs . There are some crowdfunding platforms like Kickstarter where you can pitch you product and Idea and the potential customer and pre-order the product for a later delivery. They will make their payment with a promised date and give you donations with a small reward like a T-shirt.
6. Request for government grants-
There are various government ministries which run a grant program for such kind of businesses which are suitable for the general public like medical, educational, security, and other general needs. You can check various federal grants programs at grants.gov which have more than 1000 such grants. Although it is a time taking procedure but they do not seek for any equity.
7. Consult your friends and family -
There is a proverb that " Charity begins at home". Same applies for your business Idea too. Before going out to seek the funds, you should pitch your Idea to your family members and close friends. If they agree with you and are ready to help in providing some money and resources, then you will be encouraged and go out to other Investors.
8. Fund your startup on your own-
Self-funding is also an option for you because nowadays it has become quite easy to start a business and many resources are available at cheaper prices. It may take a bit longer to save the sufficient amount of money and grow your business. But you don't have to share the equity with any other partner or Investor and your business is completely yours.
Ruchhir Agarwal is the Chief Executive and Technology Officer at E2logy, an mobile app development company that brings innovative solutions to the digital world. He is a technology enthusiast and a passionate blogger. Ruchhir leads the company in developing custom web and mobile applications that exhibit powerful features and latest technology.