Last week, I wrote an article on how to pitch your business idea for startup funding. And rather than leaving you hanging, not knowing who to pitch your idea to, this week we’ll talk about where to actually get the funds you need to get started. This invaluable knowledge will get you one step closer to fulfilling your exciting dream and become a small business owner.
Missed last week’s article? Learn how to pitch your business by clicking here.
Don’t Skimp When Starting Your Business
I know from personal experience that asking for money to start your first business isn’t something you’re looking forward to. However, I can also tell you that without a little help, it’s very difficult to start a proper business. By proper business, I mean one where you do not have to forego the proper employees, equipment, etc. in order to do the job correctly.
Let’s think of it this way: Have you ever been to a dollar store and bought kitchenware? You think, “Wow, this is cheap. I can buy everything I need for my kitchen for the price of two expensive pans!” You think you’re getting quite the deal without spending anything. But, then reality sets in.
Soon after each and every piece of kitchenware you bought from the dollar store begins to break -- one at a time. At that point, you realize you wish you would have just put forth the necessary money to buy kitchenware that would have actually held up more than 2 weeks -- this couldn’t be more applicable to your first small business.
Getting the funding you need to help start a proper business. Trust me, you’ll be happy you did. Which brings us to our first potential source of funding, the good old fundraiser.
You’d be surprised how quickly you can raise funds by using a simple tool like a fundraising site. These sites are all over, and one of the most popular ones is Gofundme.com.
The advantages to utilizing a fundraising site are:
You can raise money quickly by simply pitching your ideas through video or written words.
You can reach a wide range of people all over the world willing to throw in a buck or two.
Funds are collected without spending a lot of your own money.
It’s easy to gain recognition which could lead to bigger opportunities.
Startup Investing Company
One of the oldest ways in the book to get startup funding for your new business is to pitch your idea to a company who invests -- yes, these companies actually exist. In fact, a quick Google search will produce multiple companies both locally and nationally you can pitch your idea to.
The advantages to pitching your business ideas to a startup investing company are:
If your idea is chosen you have access to a greater sum of money, allowing you to start off on the right foot.
You can utilize the company’s expertise in small businesses to ensure your success
Investing companies are connected to large networks of other investors. If they do not choose to invest in you, they may point you to another potential investor.
Established Business Partner
Oftentimes, other successful business owners see partnering as a way to expand their own business. As such, find similar businesses to the one you’re starting and pitch an idea to the founder to become partners. Of course, this pitch will be different than others, so you’ll need to prepare why a partnership is advantageous.
The benefits to finding an established business partner are:
You’re dealing with only one investor.
A business partner can show you the ropes when learning complicated matters such as payroll, health insurance options, and HR.
Your small business can ride the coat tails of a partner’s success and help you gain traction quicker.
Many consumers will see your small business as an extension to a partner’s established business and are likely to trust it more.
Family and Friends
Lastly, if you’re unsure, nervous, or simply don’t feel comfortable finding investors for a plethora of reasons, you can always go to your family and friends for startup funding.
The benefits to seeking funding from your family and friends are:
Some of them may already be small business owners and will take the risk to help you out.
It’s easier to present your plan to family and friends because they are a familiar audience.
You know how to pitch your idea and what to include, but knowing who to pitch it to is equally as important to understand. Without a reliable means for startup funding, you may end up with inadequate supplies, equipment, or employees -- all of which can hurt your ability to succeed. As such, keep in mind that it’s imperative you choose a reliable, solid means of startup funding in order to produce a successful startup business.
What questions do you have about startup funding? Comment in the section below.