You may have a million-dollar idea for a small business, but launching a successful venture takes planning that goes beyond the development of a product or service. Many entrepreneurs find that the most difficult hurdle in starting their business is finding the right financing.
Even the most humble small business requires capital to get off the ground. Getting the money to cover your start-up costs and build up some capital should be a priority. Most small business owners are self-financed but eventually need to find outside investment to expand towards success.
When formulating your business plan, you will need to consider many financial factors, including overhead, asset management, and cash flow. If traditional financing through a bank is not going to work for you, it’s time to get creative. You can start by answering questions like, “How much can I get for a title loan,” or look for an angel investor. Let’s look at a few unique ways to find financing for your small business.
Wealthy investors are always looking to put their money behind the next big business. Angel investors are essentially people in the industry willing to put up financing to help small business enterprises get off the ground. These types of investments may seem like a gift from heaven, but they most often come with obligations and contracts that benefit both parties. Angel investors generally require a share in the business and percentage of profits before they agree to finance. You can search for interested angel investors on platforms like SeedInvest.com.
Reaching out through a crowdfunding platform like Kickstarter.com allows you to reach millions of potential people willing to donate to your cause. Your crowdfunding profile gives you a platform to let the world know what you have to offer, your future goals, and your financial needs. Most crowdfunding sites require you to set a specific monetary goal and a timeframe to collect donations.
Small business owners often use every financial asset they have to accumulate the financing they need. From clearing out savings accounts to borrowing from family and friends, much of the initial business costs come directly from owners. It’s essential to evaluate all of your assets to determine how you can best utilize them.
If you own a car, boat, or RV you can apply for a title loan. Title loans are a secured form of borrowing where you can receive money up to the value of the vehicle that you are putting up for collateral. If you own a car, you can take out a loan for the value of the vehicle and only forfeit the vehicle if you fail to pay the loan.
You have likely contributed to your 401K plan for every year you have worked. If you are starting your own business, one of the easiest ways to get financing is to tap into your 401K. You may have to pay some minor penalties for early withdrawal, but if you work with your financial advisor, they can give you the best advice about how to avoid fees and taxes.
Starting your own business can be an exciting venture if you can find the money to get it off the ground. Consider some of these unique ways to get the financing you need to make your entrepreneurial dreams come true.