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Sometimes it seems as though everyone and their mother has an idea for a really great business. Of course, just because they have an idea doesn't mean that their idea is any good! Plenty of people find themselves with what they think of as a great idea but then discover that it doesn't really hold up to much scrutiny. However, there is another side to things that a lot of people deal with. They have a genuinely great idea, they drive to make it happen, but are left without one incredibly important thing: money. It's a sad fact that, no matter how good an idea it might be, no business can get off the ground without some form of capital. Of course, that gets many business owners into a strange sort of Catch-22. You can't start your business properly without any money, but without your business, it can be difficult to actually make the money that you need. This is the place where even the most promising businesses can sometimes fall down before they even get going. Of course, funding your business must be possible, otherwise, no business would ever actually get past the planning phase. With that in mind, here are some of the most common ways to get your business funded.
Investors
This is probably the most common method through which a lot of up and coming businesses find the capital that they need in order to grow to the next level. Investors are individuals or companies, usually, with a lot of money to throw around, who are willing to provide you with capital in exchange for the guarantee that their investment will return in full, will interest. Remember this: investors are not guardian angels helping you out of the goodness of their hearts. They expect a return on their investment and almost every investor in your business will want at least a degree of control over your business in order to make sure that they get it. If you want to court investors, then you're going to have to be able to convince them that you can be trusted with their money. Not only that but it's important to be willing to work around the desires and interests of investors in the event that they provide you with the money that they need.
Crowdfunding
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For those who don't want to be beholden to a handful of people with money, crowdfunding is one of the best methods around today. A fairly new method of raising the money that a business needs, crowdfunding essentially democratizes investment into your business. It allows your customers to help you raise the money that you need, in exchange for rewards. Customers donate to your business and get different benefits depending on how much they donated. A small donation may get them your product slightly before launch, whereas a larger donation might allow them to become a partner in the business. The great thing about crowdfunding is that it cuts out the middle-man and encourages a much closer relationship between businesses and customers. There are plenty of different platforms you can use, and it's important to check out the best crowdfunding sites and figure out which one is right for you. One thing that is important to remember is that, if you're not able to raise enough money to meet your goal, you have to return every penny that was donated.
Personal or business loans
Of course, there's a chance that you might be interested in using some slightly more traditional methods to raise the money that you need. Taking out a loan to raise your capital is a particularly good idea for anyone who is in the very early stages of their business. Creating an effective crowdfunding campaign or a presentation for investors often require having to have something to show for yourself. This might be a proof
of concept or even the beginnings of the business itself. If you're trying to turn your business into something more than just an idea but haven't been able to produce anything yet, then you're not going to have much to show customers or investors. Taking out some a loan of some kind is a great option if you're looking for a short term cash injection that might allow you to produce a proof of concept or get your business off the ground. Just remember that loans need to be repaid, often with interest. Don't be afraid to shop around so that you're not left paying back more than you can actually afford.
Your savings
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Of course, sometimes the simplest option is the best one. Starting a business is going to involve at least a degree of sacrifice on your part and sometimes that sacrifice is going to need to be a financial one. That means that you might have to dip into your savings in order to get things off the ground. It's important to think of this money as an investment. You’re investing in the success of your business and, with some hard work and a little luck, you should be able to earn that money back many times over. This isn't going to be an option for everyone since not everyone has savings that they can dip into but if you have the money to allow it, and you have genuine faith in the quality of your business idea, then it can be a great way to get your business off the ground without having to give control over to anyone else.
Remember, not every single one of these funding methods is going to be right for every type of business. Think carefully about the kind of business that you're running, as well as the kinds of levels of control that you're willing to give up. Think carefully about which funding method fits with your business. Not only that but make sure that you're not getting overly ambitious. Any money that comes into your business needs to
be allocated properly, and if you're bringing in too much capital at once, that can increase the pressure on both you and your business to produce results that you're simply not ready to achieve.
