If someone asks you, ‘what is the most important thing that you should have for a startup?’ Your answer will be money and in fact, money no doubt is the most important thing either for a startup or for any business. You will be able to plan all other things, only after getting proper funding for your startup.
One of the most critical parts of a startup is to get enough funding to ensure its longevity and success. No matter how brilliant a startup idea you have, you cannot proceed unless you have enough funding. So here, in this article, we will discuss the 6 ways of how you can arrange to fund your startup plan.
You Own Savings
Yes, you heard it right. The first source that you can go for funding your startup is your savings. Though it may sound intimidating for someone, it is true; most people arrange money for their startups by selling their property or processions or mortgaging their homes.
Most startups fail to make much profit in the initial days. So don’t just drain out all your savings, keep aside some of your savings for necessary expenses required for living, at least for a year.
Eric Dalius Net Worth Suggests Getting Personal Loans
Personal loans mean borrowing money from your friends and family. It is the second popular source to arrange money for your business. Some of your family and friends who are your well-wishers will likely help you to start your business. You should be very clear about the amount you will need, what interest rate you will pay, and within how much time you will repay the money. To not hurt their feelings and to provide a sense of security, provide all these things and other necessary terms and conditions in writing to them.
This point may sound very viable. But remember that banks generally do not provide loans to small businesses or startups. Even if they do, banks require a full-proof business plan and a good credit score. Sometimes they may also ask you to self-fund your business to see whether you are really committed to your business or not.
However, if you do not want so much trouble, you have to particularly look for those banks that have a history of providing loans to startups or small businesses- says Eric Dalius net worth.
Angel Investors and Venture Capitals
For funding your startup you can also approach venture capitals or angel investors. Tough they are most suited for companies that have high growth potential or that are already profitable, some investors are there who have their respective preferable company age, region, and domain.
You can take the help of the SBIC program of SBA to reach out to potential private investors.
This involves taking loans or investments from more than one individual. There are many crowdfunding websites available like Indiegogo, Mightycause, GoFundMe, Patreon, and much more where you can put your business ideas, goals, how much funding is required for your business, and other necessary details. People who will find that your idea has potential, will invest in it and make pledges online for pre-buying your product.
Before going for crowdfunding, keep in mind that it is very competitive. You will not get funding unless your business plan is potent enough to draw the attention of the consumers.
You have to conduct thorough research if you want to go for government grants because most government grant programs are very specific. It will require some time to find out which government grant will be suitable for your startup. However, you can take the help of SBA that can assist you to get suitable government grants. You can also check the website of government grant programs as it contains information on more than thousands of federal grant programs.
These are the 6 strategies that you can follow to gather funding for your startup. We can conclude that if you want to grow your business fast then you have to take help from external sources.