One of the greatest challenges for entrepreneurs wishing to start their own business is that of raising capital. The term ‘capital’ in this context relates to the amount of money required to launch a business and get it off the ground.
There are a number of ways you can reduce the amount of upfront capital you require and many early stage businesses find ways to bootstrap their business in the early days. Indeed, many of the most successful businesses started out with very little capital at first, and as a result, they have a culture of being much more resourceful and frugal with their resources – which puts them in good stead for future growth.
See, your company will develop cultural habits, just like you do as an individual – and one of the best habits you can get into is to be more resourceful and frugal. The other great habit is to keep as little debt in your life as possible, be that on a personal level or within your business life.
If you’re currently in debt, then a great way forward is to consider consolidating your debt (e.g. https://debtconsolidation.loans/debt-consolidation-loans-bad-credit/) in order to manage your finances more efficiently, meaning you will pay less fees and have a lot less financial stress in your life.
Raising capital is rarely an easy task, and for many entrepreneurs it can be a scary process – particularly if they are considering going before a panel of investors where they will be grilled about their business. Furthermore, the prospect of having to give away control of your company due to financial need is a prospect many entrepreneurs fear.
With that in mind, here are three ways you can go about raising capital without having to ‘sing for your supper’ and pitch your business to a panel of investors plus a way to keep control of your company.
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GET A BUSINESS LOAN
The most traditional route for setting up a small business is to get a small business loan.
This is one of the most easy, reliable, and stable ways of financing your business, the benefit being that you get to keep complete control of your company, and also convincing just one person, is a whole lot easier than having panel interrogations.
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FRIENDS AND FAMILY
If you have a wealthy relative or friend who would be open to backing your business for a small incentive (such as interest on the loan) this can be a great option, as it will cost much less than commercial financing; also, some people will lend you the money without charging you anything – as there incentive is to see you succeed.
There is, however a cautionary note when it comes to borrowing money from friends and family; as it is worth considering the potential strain put on the relationship should the business not turn out to be a success, or for you to struggle to pay back the amount borrowed.
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CROWDFUNDING
A recent trend is that of crowdfunding; this is where you pitch your idea on an online platform such as www.crowdfunding.com and people can pledge cash to back your idea. This is an interesting platform, but it can be expensive, given the commission fees such websites charge.