When starting a new business one of the most important things to think about is getting funding. You won’t be able to get anything done if you don’t have money to spend. The question then becomes, where are you going to get the funding from?
Recently, many new businesses have started as a result of crowdfunding sites such as Kickstarter or Indiegogo. All you have to do is create a profile for your product or service. This profile will include a detailed description of your business, such as goals, future financial strategies, target audience, and how much money you need and what the money is going towards. Then potential consumers can read about your business and give money, if they choose to. Typically, those who are pledging money to your business are pre-buying the product or earning some type of reward for their money.
Just be careful when using platforms such as these. There are many amazing products and businesses that go unfunded every year. These sites are very competitive and there are hundreds of ideas on it each day. Be sure that you have a good story and can truly sell your product/business to the everyday consumer or else your business will fail on one of these sites.
An angel investor is a person, or a small group of people, who decide to invest in your company. The only thing to keep in mind when deciding to go with an angel investor is that they will typically ask for a large percentage of your company, which means that when you make money they also make money. Nevertheless, they can be great mentors. Moreover, this will allow you to keep control of your company.
A venture capitalist investor is basically a professional group whose goal is specifically to find new startups to fund. As a result of the nature of this type of business, there is a lot of money for startups to receive and many resources that they can take advantage of to help their business succeed.
Downsides of this type of investment are that these group usually look for larger opportunities that they believe will be more stable. This means that companies they fund will typically have a strong team of people and you might even have a great deal of money in investments already. Another thing to think about is that you might have to relinquish some control of your company to these investors.
Small Business Loan
For many people looking to start a business the first place they think they can get money from is a small business loan. While there are many small business loan options that you can take advantage of, the issue is navigating the system properly. You have to be able to present every little detail to the bank and sometimes the bank won’t even end up giving you the loan, especially if you are a first time business owner.