Having a great business idea is one thing, financing it is another. For startups and medium businesses looking to expand, things like a new website, tech team, office space, and operations cost are necessary expenditures that need to be considered regularly.
Most businesses and entrepreneurs need funding to get off the ground in the early days. The good news is, there are multiple places to get funding and some are even overlooked.
Start with what you have
For most entrepreneurs, bootstrapping is the first option. It means financing your new venture by acquiring personal funds. This includes savings account, credit cards, and home equity line if applicable.
Using your own money instead of borrowing or raising is a great approach if it’s possible. Many entrepreneurs bootstrap until their business becomes profitable. This can good since you won’t have extensive loans or monthly payments to bog you down, especially if you experience issues along the way.
Here are some common places to start and without asking your family and friends.
For those looking to launch a small company, the best place to start looking for external funds is through a local small business development center. Many universities also have one. These centers will not only help you connect with groups of entrepreneurs to network with as well as angel investors for funding.
If you want to upgrade your business quickly, it can be advantageous to utilize a local bank. If you’re in Singapore, you’ll find business loan banks that specialize in helping sme businesses take off through loans. Getting a loan helps if run out of funds or decide you require something special for your business.
Find angel investors
If you’re to open a start-up, you’ll probably require more capital to get going. This means hiring people or get office space. You’ll likely need to find external investors. A good place to begin looking is angel investors, who are usually established business professionals with high net worth looking to invest in promising companies. An angel can invest anywhere from $10,000 to a few million dollars.
To find angels, you can inquire with other entrepreneurs in your network, or check out the Angel Capital Association, which now has over 330 angel investor groups. There’s also AngelList, a website that aids entrepreneurs to connect with interested investors. The site has in fact helped more than 1,000 start-ups get funded.
Take out a loan
Many countries have banks that offer loans for businesses of different sizes and industries. For example, SME loan in Singapore offers up to S$500,000 to help small and medium businesses start or expand. If you can show that you’ve begun gaining traction and making money, you may qualify for a bank loan. Each bank and individual situation differ, this may be a good bet for businesses looking to get funding.
Getting funding is oftentimes the hardest part of starting or upgrading a business. Once you’ve saved, go approved for a loan, or found an investor, you can begin your dream job! It’s a long road to success indeed, but knowing that you have several options to choose from to keep your business afloat or competitive ensures success so long as you’re committed.