For people with tech-based ideas, the most common option is to attract the attention of angel investors or venture capitalists, but finding an investor is harder than ever because most companies are working that angle. What can you do to get your business off the ground?
1. Friends and Family
A good way to get started with your business is borrowing from friends and family. Convincing lenders and investors is hard, but the people who will always believe in your dreams are your friend and family.
They can help you with funds to get started with your business. When you accept the funds from your friends and family, then make sure you have explained to them what that means and sound legal advice, especially if the cash comes in the form of a loan.
The downside to this method is a sour relationship with friends and family. You should be careful because you can end up losing your friends and being on bad terms with your family.
2. Small Business Loans
There are banks that give small businesses loans, but they are usually very careful about giving money to small companies. Qualifying for these loans can be difficult. There are different types of lenders, and there is a good chance you can find one that is going to help you out.
The downside to this is some alternative lending companies are predatory. Before you sign anything, make sure you have researched the company you are borrowing from. You can secure short term loans for bad credit to get you started.
3. Trading Equity or Services
Are you looking to have web design done? You can look for something you can barter the services. This can be a friend or neighbor doing freelancing on the side. Everywhere in the country, there are fledging business owners working together.
The downside of this method is this is not a great way of making a living, and not everyone will be ready to do it. Don’t be offending when someone says no.
“Bootstrapping” is one of the most popular ways of starting a business. This is where you use your own funds to start and run your business. The money can be from personal savings, whether low credit cards or mortgages and lines of credit. Request for your free credit report so you can know where you are financially. When you have this information, you will know what you can expect in interest rates when you apply for a loan. Good credit means you get better terms on your loan.
The downside to this is, if the business doesn’t succeed, you can end up in a lot of debt and you will be forced to manage it.
5. Incubator or Accelerator
Incubators and accelerators have become popular and are coming up all over the country. They tend to pop up close to colleges that have a strong business program. They involve part mentorship development centers and part communal workspace. Businesses get the chance of getting a great start while having the chance to partner with amazing people.
The downside to this is they tend to focus more on tech-heavy businesses, which can make it hard for you to find one that works for your company.
Crowdfunding can be a great option if you are good with social media and have a sexy idea. When websites like Indiegogo and Kickstarter first started, many businesses succeeded because they got a lot of funding through this option.
The downside of crowdfunding is that many companies are doing it, and you have to generate a lot of buzz to succeed. Some end up overextending themselves which can end up frustrating their backers, resulting in a great deal of animosity before the company even takes off the ground.