The Basics Of Arranging For Capital To Start A New Venture

A gem of an idea can make a successful business empire. Facebook at its start was just an idea, which became a business empire. The prerequisite of any venture is the arrangement of capital. Without the funding/capital needed to start a business, you cannot convert your idea into a business.

In today’s entrepreneurship centric world, there are many ways to get money to start your business. It’s your dedication and perseverance that will help you to get that funding.

There are many options that you can explore to arrange the much-needed capital to kick start your dream business. A few of them are

Start small

You can start your business small so that it does not affect your normal lifestyle or family life greatly. You can do the following

  • Start your business part-time while continuing your job so that you can keep meeting your financial needs while working to set up your dream business.
  • Start from home thus saving the rent of office.

  • Lease the equipment required to minimize the purchase cost. When cash flow is regular buy only the most needed equipment.
  • Try to line up two or more commitments for work.
  • Start by working as a vendor for overflowing or small work of big companies.

Friends and family

  • Friends and family can be your start-up investors.
  • This is a group that knows you well so this could be the most supportive group of investors.
  • They can also provide you with business leads
  • Prepare a business plan so that you can explain your idea clearly
  • Explain and understand their roles i.e whether they can be stakeholders or will get a fixed/variable return on investment or the money you are getting is a gift.

Alternate source of funding

These can be useful for small scale funding. Few of the options are

  • Micro loans – There are many sites that provide micro funding. You can explore and look at their eligibility criteria.
  • Crowd funding – These sites provide you access to many small-scale individual investors. You need to post your campaign and target amount that you want to raise. You need to define the benefits for investors in order to attract their attention. Here multiple investors pledge their contribution to reaching the target amount.

Small business development center

Many Universities and the Small Business Administration (SBA) have small business development centers. They help you by helping you to connect with a group of entrepreneurs for networking and various angel investors for funding.

At the later stage of your business, when you are planning to expand and grow, Angel Investors and Venture Capitalist can be a good source of funding. They are quite popular in tech businesses. When your business starts growing and earning money then you can also approach banks for traditional loans. They can give you flexible loan options to help your business grow.

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