Want Financial Help For Your Startup? Here’s How You Can Do It Without Much Hustle
It is extremely difficult for a start-up to stay afloat even after putting in the work and the hours. You can have honest employees and a good strategy to go ahead, but within two years, a very high percentage of the start-ups are still forced to shut down.
The primary reason that leads a startup to shut down its door is the lack of finance and piling debts.
The backbone of any startup will always be the financial resources that it has. Without the proper financial support, a startup can’t survive in this overly competitive world.
A consistent flow of working capital is the basic need for any business that exists to date. If you take out the cash, the company will cease to exist, just like any fire goes out without oxygen. If you have a great startup idea and believe it will create an impact, then looking for adequate funding is very important.
Here are the best ways in which you can get the right financial help without much hustle.
Bootstrapping your business is one of the primary ways in which you can fund your startup. This involves the use of your savings or other funds that you have saved over the years. These funds can also be sourced from your parents, friends or other family members.
This process of utilising what you have saved up or asking for funds from your close ones is called bootstrapping. It can also be named self-funding. This can be beneficial since you will have flexibility when it comes to repaying their loan amount. They won’t even charge you interest rates.
The use of modern technology has helped people to connect to the world with ease. That is why you can now. Share your ideas and thoughts with the entire community. This can be an effective way of funding your business in its initial stages. This is called crowdfunding.
These platforms ask individuals to pitch their ideas and strategies to a whole community of investors willing to support a cause if they find it groundbreaking. You will need to share your business ideas, objectives, model & goals with them. If the idea becomes a hit, you will see people pledging their support to you.
3. Angel Investments
Do you know who angel investors are? Well, these are high net-worth individuals and well-known
personalities who have earned tremendous wealth in their career. Angel investors are often looking to invest in startups that they believe can boom in the future. They will provide you with the startup’s capital and make sure there is consistent cash flow for a particular period.
In turn, they look for an ROI of at least 25-60%. Apart from the financial capital, many angels investors will also act as a mentor who is going to guide you on how to run the business or tips that will help you expand it the right way. However, due to the very competitive market, it is not very easy to get hold of an angel investor in today’s time.
4. Apply For a Loan
When we talk about the traditional ways of raising money, applying for a loan comes to mind first. Even though taking debt in your initial business days is not favourable, you must do what’s needed if it is the only way to raise capital. But, you can surely reduce the liabilities in many ways:
- Ensure that you have a good credit rating because they attract lower interest rates, reducing the monthly payments.
- You must be sure of the term of repayment. Don’t drag it too long because they attract more interests and can be hectic to pay off in the long run.
- Always visit a reputed and trusted lender.
5. Keep a Day Job
Just because you will launch a startup does not mean you have to quit your job. Many young people make the mistake of leaving their day job when they think of launching a startup.
But this idea is not sustainable at all. When you have a day job, that means you have access to a fixed source of salary coming in every month. Instead of discarding it, keep working and start saving more of that money.
It will surely help you to utilise these funds for your startup shortly. It is always preferable to have a side income to keep the cash flowing in.
6. Make Investments
If you have a good amount of money savings, then instead of using it all up, you can invest some of it in stocks, mutual funds or other investment options available. This will help you to create a passive income in the form of dividends and interests.
Also, when you remain invested in equity assets, your money grows with time, enabling you to build a good amount of capital after a few months or years. When you see that you have reached your target, cash out all the funds and invest in your startup.
7. Final Words
So, these are the best ways in which you can start funding your business now. Each of the tricks discussed here is very effective and proved to be a game-changer for many companies. Now, it is your time to try them out and let us know if they worked.
Funding your business is the key that helps you to unlock a whole new dimension of your business idea.
Lack of it can crush your business to pieces. That is why you have to be clever and smart enough to know how you will fund your business. It is a tedious task but achievable.
You have to work hard for it. Whether you go for crowdfunding donations or apply for low apr credit cards, make sure it doesn’t turn out to be a debt. Do proper research on all the methods mentioned above and make an informed choice on what will work best for you.
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