Starting up a business is by no means an easy process, and you can often find that you’re eating up more money than you’re making, especially in the first few weeks or sometimes even months. But there are ways to fund a new venture to save you having to take out any short term loans and we’ve pulled together a few top tips for funding your start-up.
Don’t quit your job.
This might feel like taking a step back or not putting faith into your venture, but keeping any jobs you may have can actually benefit you in the long run. The long days and nights you will likely spend trying to start up a business while still working will be worth it in the long run if you’ve self-funded. There’ll be no loans to pay back, or at least fewer than you had before, and a higher sense of satisfaction when your business finally makes it. Self-funding to begin with can help prove the concept you’re going for, prove how dedicated to your project you are, and ultimately actually pull in more keen investors.
Seek a bank loan
This isn’t always possible for new start-ups unless you have a good credit history and assets that you can use as collateral, but if you can get a loan it can be a good way to get a large sum of cash before you work on finding investors. You’ll have longer to pay the money back than you would with a short-term loan, and you can work out affordable payments back to your bank.
Negotiate an advance from a potential partner or customer
If you already have potential partners and potential customers, it’s entirely possible to fund your start-up this way. With sites such as Kickstarter and GoFundMe becoming more and more popular in today’s society, start-up companies are finding it easier than ever to get funding for products and ventures by gaining a following before the product is even ready to be distributed. Kickstarter, for example, allows you to select the option to ‘start a project’. From here you can fill in all of the relevant details, promote your product through the description and images, and then get to promoting. Social media is a hotspot for Kickstarter posts, so use this free promotion method to your advantage.
Be prepared to fund yourself
Just like sticking to your day job, you may find that you have to take matters into your own hands when it comes to funding your start-up. Not every start-up worthy of investment will actually get investment, and sometimes it’s a case of giving up some of your time to earn the cash to push your own product forward. The aforementioned sites like Kickstarter or GoFundMe make for a variation on self-funding, but sometimes it takes more than that, especially if you can’t get the funding to take off. Having a job or offering smaller, simpler services while you build on your bigger one can be well worth the effort.
Save money where you can save money
Sometimes it literally comes down to cutting costs to make sure you have the extra money set aside. There are plenty of ways to cut costs that you may not have thought of, including co-locating with other offices, sharing office services, using equipment that you or your employees already have – such as computers and laptops – and think about approaching interns from business school who might be willing to work for you for free for the experience of starting up and working in a company.