Starting a business based on an idea that you think could improve the lives of others is a very exciting, yet difficult, task to embark on. With several hundred million companies already built by enthusiastic people such as yourself, the question of whether my idea is good enough is definitely a burning one.
All questions aside, there is still the need to decide upon the business strategy, and more importantly — how the new business is going to be funded. Will you have to sell your car? Get a mortgage loan? Invest all your life’s savings? None of these would be a first for many other people, but thanks to the rapid growth of industries such as startups, small business, and crowdfunding — there’s now an opportunity for anyone to become a business owner, given that their ideas is good, and could potentially stick.
It certainly can save you from a potential disaster, and there are several other advantages of reaching out to other establishments for an investment plan that could get your idea off from the paper and out in the real world.
This is a classic technique for raising money for a new business idea, and is considered one of the safest ones. The way bootstrapping works is that you mostly do all of the work yourself, so this is the one way of acquriing funding where you actually have to put your skills and knowledge to work for you. Some of these may include:
- Writing technical content for sites that resonate with your idea.
- Using your design skills to freelance, help out other businesses.
- Establishing an early online merchandise store to sell items like shirts, stickers, etc,.
- Getting heavily involved in social media around the networks that resonate with your idea.
It’s all the basic stuff, it certainly is going to be a lot tougher, but in the end you call feel good about yourself — knowing that all the funding was acquiring thanks to your own set of skills, and you don’t have to answer to anyone about losing some here and there.
We recommend that you check out Jon Yongfook’s story of bootstrapping his startup, and how he was able to do it. Getting the initial funds is only half the battle, not paying yourself for several months is something completely different. Jon explains that in his report beautifully.
The second best way of getting that initial funding is by launching your business through a crowdfunding platform such as Kickstarter, GoFundMe, or Indiegogo. A crowdfunding platform takes away all of the strain of having to raise money through your own skillset, and instead you can focus on promotional and marketing campaigns to make sure that your project does get funded in the end. The biggest advantage here is that you also build a community around the business you’re trying to launch, giving you the initial customers without having to do much else — and we have seen some great success stories with this type of funding before.
Kickstarter constantly update their data and the amount of completed projects would scare most banks. They are upfront about their fee, it is 5 percent if you are successful.There are many other crowd funding options now that Kickstarter have blazed a trail. They include crowdcube and Seedrs. Transparency and building a community are the main benefits the negatives are that you might have a large number of investors. — Elaine Thompson
3. Angel Investors
These are the guys who have several decades (most often) of experience in a particular field, they’ve made their money from creating their own businesses in the past, and have moved on to helping others to do the same by funding their projects. Ideally, you want to reach out to an Angel Investor once you’ve exhausted all your personal resources, such as friends, relatives and other connections.
Getting funding from angel investors isn’t easy, but it can be done if you take the right approach and are a good match with their interests. And the benefits can beyond the money for your business, but their expertise in both in business operations and your industry niche. — WSJ
However, no Angel Investor is going to write you a check just because you ask. You have to come prepared, and by prepared we mean full market research, a strategic business plan, and already established progress on trying to get the business off the ground. And because an Angel Investor is giving you his own money from his own pocket — expect this process to take several weeks, up to several months to get a clearance for the check; nobody wants to invest in something that won’t turn profit at some point of its development.
Other than what we have looked at already, there are government grants, banking loans, even startup incubators — which are usually aimed at people who are really up to par with the latest development in their industry, and are willing to invest the next few years of their life in building an idea. Entrepreneur magazine has a special sub-section of their site where they talk all about raising funds, and we highly recommend to indulge in that content as it will be invaluable to getting your idea funded.
Alex Ivanovs is an online entrepreneur who has been writing about technology, business and developer topics for over a decade. He currently manages CodeCondo — an aspiring community for designers and developers.