The steady market growth we are seeing right now – despite the uncertainties surrounding the market itself – presents a lot of opportunities for small businesses and business owners. There are a lot of opportunities to grow and reach new heights, plus there are more market demands to support new business ventures. Now is the perfect time to invest in your own small business.
Of course, there are a lot of challenges you have to face when starting a new business and taking it off the ground. One of those challenges is financing. So, how you can you finance the new business and its operations? There are some financing options you can consider when you are just getting started.
A Self-Financed Venture
If you have been managing your personal finance meticulously, chances are you already have enough savings for a new business venture. Starting a business is not as expensive as many imagine, especially since you can now run the business as an online venture. With a simple online storefront and a home office, you can start catering to thousands of customers from across the country.
With the starting capital kept at minimum, the idea of self-financing your small business becomes an option worth considering. You can invest your own money into the business and begin earning income immediately. Even better, you retain control over your business. You will also be rewarded for the time and energy you put into growing the business.
You don’t have to go straight to business loans to get the financing you need for a new business. After all, business loans have stricter requirements; you need to have a solid business plan and good credibility as an entrepreneur to get the financing you need to get started.
In most cases, applying for a personal loan is a lot easier. Using personal loans for productive purposes will offset the costs of the loan and allows you to generate more income. Besides, today’s best personal loans are not only affordable, but also very flexible.
You can get up to £100,000 in loan – sometimes bigger, depending on the lender you approach and your credit history – at a relatively low interest rate. Figure out the cost of using the loan and see if you can offset that cost with the income generated by the new business.
There is also a time delay to take into account; your business will not begin making money until it is fully operational, so you have to think about that gap too. As long as you have the basics covered, using short term loans to fund your new venture is a worthy option to consider.
When you have a good business idea, you also have the option to bring in investors from the very beginning. They will finance your business idea while you invest time and energy into the business. In return, you give up a portion of the company or share the operating profits until the investments are covered.
Friends and family members are among the investors to consider. You have to think about separating professional and personal relationships with your potential investors, but friends and family members tend to be more flexible with the return they expect from their investments.
Venture capitalists or VCs are also easier to find, which means going this route is also an option worth considering. Whether investors are interested in backing you depends on your business idea and how well you present it.
In recent years, crowdfunding has become the go-to method for funding a new product. You still have to invest in developing a product that the crowd – your potential customers – would like and marketing your product idea to the right audience, but once you get the ball rolling you can get the financing you need to turn product ideas into actual products quickly.
There are a lot of crowdfunding platforms to choose from too, with Kickstarter and Indiegogo being the most popular ones for new products. Other platforms let you finance an entire business and use items like exclusive merchandise and pre-released products as the rewards offered to backers.
The big challenge in crowdfunding is convincing the audience that you have a solid product that is ready for manufacture. There have been a lot of failed crowdfunding campaigns wearing down the audience’s desire to fund projects, so you have some extra miles to go through in order to win their attention and support.
Other funding options – including business loans we mentioned earlier – are also worth considering, but these four options are certainly worth considering. The sooner you can secure a suitable financing for your new business venture, the sooner you can start operating and generating income. Once the business is started, the rest is easy from there. You have the whole market to conquer and plenty of opportunities to seize.