How do you raise the start-up capital for your business?
Are you thinking of starting a business today?
The question of start-up capital is the next question and is probably the biggest problem faced by those who want to become entrepreneurs.
To start with, launching a new business requires much skill and preparation. Entrepreneurs may not have the resources to raise capital in order to market their new business ideas; therefore, some great business ideas never become commercialized. This is a common dilemma that many entrepreneurs face. They often speculate about how to raise capital and same time, are unsure about how their startup will have the needed financial security to properly stay on track. Before a new business owner can raise capital for their startup, they must first identify the different sources of funding, find one that is most compatible with their needs, and then meet the given criteria of the investor or bank. These crucial steps can mean the difference between having the opportunity to successfully raise capital and leaving their new business ideas behind.
Personally, I’ve heard friends say that if only they had enough capital, they would really quit their jobs and put up their own businesses. Admittedly, I was also burdened until I made some researches and practically applied what I learned.
I’ve found out that there are actually many ways to do this. Some are easy and some are not. Some are quite obvious while some takes a little creativity and a bit of due diligence to make it work.
So if you’ve always wished that you had enough funds to start your own business venture, then I hope that these following ways can help you raise the capital you need to become an entrepreneur.1. Personal Savings
Saving is difficult? I don;t think so. You just need to sacrifice some pleasures now. The most obvious way to get your start-up capital is to save money. Be prudent, live below your means and pay yourself first. The advantage of this method is that if your business fails, then you owe nothing to anybody and you have no financial burdens to worry about. No debt!
However, although this may seem ideal to some, it could take a long time
before you finally have enough money saved to start. Recommended for those who are not in a hurry to start a business and those with very low risk-tolerance. 2. Friends and family
(For Love and Money)
It is a known fact that it is easier to get money out of people who love you or need you than it is those who don’t. Many business people are too proud to go to their parents, siblings, uncles or cousins for money to build their business. But wealthy family members give their money to total strangers all the time to invest with other strangers who may, or may not make them any money. So, approach a rich family of friend for assistance today. Quick interest-free cash! http://www.bestnaija.com/viewforum.php?f=153. Liquidate Assets
Aside from digging into your savings account, you can also sell some of your assets. My father’s friend sold their old family car to put up a small photocopying center. Depending on the amount of capital you need, you could simply look around the house and sell whatever you have such as those tech gadgets and appliances, your jewelries and even some of your furniture or appliances.
If you have portfolio investments, you can ask your broker if you can liquidate some of your paper assets or withdraw from your mutual fund or time deposits.4. Work For Extra Income
We often look for ways to earn extra income only when we are in financial need. What many people don’t realize is that, finding a second job or working on a sideline is a great way to raise capital for your dream business. Assuming that your current employment can cover all your financial requirements, then the profits from your extra ventures can all go straight to your start-up funds.
Going this route can be time consuming and exhausting but it’s relatively faster than just doing the two previous methods.5. Take A Loan
I know many people are scared of taking loans because of high interest rates. However, a personal loan is something you can leverage on especially if you are employed. Depending on your credit history and employment status, most banks are willing to offer these types of loan (salary loans) without much hassle and without collateral. Diamond Bank PLC offers such good loans.
Micro Finance institutions can also provide non-collateral personal loans to those who can present to them a sound business plan.6. Government funding and the SMEs
Government loans by the SME administration are also considered a valuable source for new business owners who seek to raise capital. The SMEs hasve provided a resourceful means for several thousands of new business owners to raise capital.
However, before approaching the SME bodies as a source to raise capital, entrepreneurs should be aware that the SME does not lend money directly to new businesses, but instead, acts as a guarantor through a network of local lending partners to help promote the startup, growth, and success of small businesses. Since every new business is different and has its own specific monetary needs, entrepreneurs need to properly estimate how much capital will be needed for their new businesses. Some new businesses can be started on a small budget, while others may require considerable investment in inventory or equipment. It is vital for entrepreneurs to estimate this amount before deciding to raise capital through the government SME.7. Co-operative societies/Contributions
These serve as another means of raising capital to start a business. Very similar to simple contribution among a number of people, you can easily get more than enough funds here especially when it is difficult to single-handedly raise the fund yourself. It is very ideal for people with regular incomes/salary earners.
Hoping you enjoy these. Please if you have other suggestions, add to this list. Thank you.