June 22, 2017

5 ways to raise money for your Startup

Ideas alone aren’t enough to fund a startup, even if you have invented a unique product or plan to provide a service nobody else has thought of.  At the end of the day, you will still need some ready cash to develop a business plan, research the market, produce prototypes, and promote your creation to potential customers.

So, in order to get off the ground, the best plan of action is to explore some sure ways of raising capital. With this in mind, here are some suggestions on how to make money for a brand new enterprise;

Financial Trading

Although  expert argues that financial trading always involves an element of risk, the potential rewards can be huge. Certain markets, such as Contracts For Difference (CFD) give investors much more freedom and flexibility too.

CFD trading allows you to open a contract for the difference in price of an asset, from the point of opening to when you close. Since this is a leveraged product, you only have to put down a small deposit for a much larger market exposure.

Crowdfunding

Crowdfunding may well be a relatively new way to raise business capital, but for certain organisations and industries it can be incredibly effective. Essentially, it enables anyone to contribute cash towards helping a business they like the sound of in exchange for incentives such as product exclusivity or a free gift.

But it all depends on generating sufficient interest on popular  fund raising platforms like Malaik.com. This means coming up with the goals of the business, future financial strategies, your target market, as well as how much money you need and why.

Venture Capitalist

This is the ideal scenario for several startups. As a venture, capitalist investor typically has a lot of money to offer as well as countless resources to help your business succeed.

However, venture capitalists tend to back larger organisations that have already demonstrated stability in the marketplace. On top of that, you might be asked to relinquish more control as well.

Small Business Loan

Banks and Saving and Credit Cooperative Societies are sometimes reluctant to provide startup businesses with loans since they are careful of financial crisis. However, this is still the most viable option for several entrepreneurs.

But to secure funding from a financial institution, you will need to come up with a cash flow forecast, provide collateral, identify some co-signers, present a marketing plan, and demonstrate ability to manage the money.

Friends and Family

Last, but not least, you might be able to pool enough money together from close friends and family members. Some business owners are too proud to consider this option even though loved ones will usually want to help out in any way they can.

However, there are some negative aspects of borrowing money from friends and family. Seeing that a high percentage of start-ups fail, there is a risk of losing their money. Also, if your business proves a roaring success, they may try to claim some of the profits in addition to their original investment amount.

 

Related posts