To raise money for your business might seem a daunting task. This is because the world we live in today makes it look so. To a large extent, the growth of your business is dependable on how much funding is available.
Most times, you may be able to access funds from years of savings, at some point, money runs out. This is why you must have an effective guide on how to raise money for your business growth.
You can raise money from family, equity, or mortgage secured from assets, private Investors, credit cards, etc. The various ways by which you can raise money include either or all of the following;
Raise money by bootstrapping
If you do not want to open the ownership roles to other parties, then you have to raise money through bootstrapping. This is where you dip into your savings or taking out a mortgage on some or all of your assets.
Raise Money through family and friends
The closest people who might likely invest in your business are your friends and family. They are the ones who will believe in your ideas and want to help you grow.
You have to be careful though, so you don’t lose their trust or the relationship you built over the years.
Raise money through crowdfunding
Crowdfunding is an effective way to raise money for your business ideas. All you have to do is leverage the power of the internet, and use sites like GoFundMe to raise money. You may be able to generate funds from people all around the world if you can communicate your passion expressively in the description.
Try Angel Investors
Most people do not invest in startups because of the high risk involved. However, Angel Investors invest in such margin of high returns even though it’s risky, and gain ownership equity. Therefore, you can pitch your business ideas to an Angel Investor and position yourself and your business as a venture he should be interested in.
How about venture capitalists?
They are almost the same as Angel Investors, the difference is that they prefer to invest for high returns instead of seeking ownership in the startups. They may demand interest within a few years, so you have to be well informed.
Raise money through microloans
Microloans always have short-term durations, with fewer strings attached. Microloans encourage start-ups and provide them with funds to move their businesses forward.
Read also: 9 Loan Apps you can borrow from instantly
Source for funds through Small Business Administration (SBA)
With Small Business Administration (SBA) interest rates are high, but, it’s one of the means through which money can be raised for businesses. They are slow, but, also competitive, and they provide a substantial amount of money.
Speak with your bank
These days, it’s increasingly difficult to get loans from the bank. This is due to the conservative nature of the bank as it pertains to losing money. It is important to note that banks make money through loans and lending portfolios, so lending you money is in their best interest. You have to learn the right approach to use when you are signing up for loans in the bank. Following the right way will guarantee how fast you can access bank loans and for how long.
Leverage the magic of pre-sales
Most businesses use the presale method to raise money for themselves. What you have to do is to offer preorders ahead of time, especially if you have customers with urgent or desperate needs for your product. This is a smart strategy that is used by successful entrepreneurs and they use customers’ advance payments to thrive.
Before you raise money for your business, you should be clear on your reasons. Some of the most important reasons should be to grow faster and probably gain investors on your board. Consider looking into quicker ones and those with the least collateral. Each of these areas has its downside, so you have to know what you accept and what you don’t. This helps you know when to say no, and withdraw your interest.