You can have an exceptional business idea, but it would be difficult to kick start your venture without startup capital. That’s why a 2019 study found approximately 90% of startups fail. If you’re thinking of starting an enterprise or you already launched one, you may want to consider the best ways you can raise funds. While the success of sourcing funding may depend on several factors, like business type, this post outlines the top reliable ways to get you started, including:
Government Loans and Grants
You can rely on the government to get funding depending on your country of residence. However, you need to ensure your startup idea can lead to your country’s growth. It should also focus on developing a certain industry. One of the best ways to achieve this is spotting an upcoming area and evaluating business ideas that can excel there.
For example, residents in the United States can apply for such loans through the U.S. Agency for International Development. To increase the likelihood of getting considered, you need to comply with the government’s specific legal requirements. Many countries across the globe offer such initiatives, and you may want to research to find whether yours has this provision. For more information, visit Clark Street Associates Skywater.
Before you can launch your startup, it’s vital to have some savings you can access. You can also reach out to your family members and friends for assistance. This is called bootstrapping and can be a straightforward way to get your business started.
If you can successfully convince your family members and friends about your startup idea, this can be a great funding source. One advantage of this is that settling loans from friends and family can be flexible. Here are genuine reasons you may want to try bootstrapping:
- Interest rates can be flexible
- You can access loans without bureaucratic obstacles
- Reduced challenges when getting the loans
- Seek Loan from a Reputable Financial Institution
Despite the emerging ways of sourcing funds, getting loans through traditional financial institutions is still beneficial to many entrepreneurs. For example, research shows at least 75% of funds for startups include credit cards and business loans sources. For approval, lenders may require the applicant to:
- Have a business with solid revenues
- Have a business that has been operational for at least two years
- Have strong credit
- Ongoing contracts
These are people with extra cash and willing to support startups. Working with angel investors can open reliable networks for an entrepreneur. You can also benefit from mentorship programs that can help you manage the capital and run your business.
Some of the most established entities like Alibaba, Yahoo, and Google relied on angel investors during their initial growth stages.
Participate in Contests
If you believe your business idea is exceptional, you can try your luck with contests. These are platforms for aspiring entrepreneurs with unique ideas to pitch them for an opportunity to win cash prizes. Due to competition, you should ensure your business plan is comprehensive. The idea is to stand out from other competitors. Participating in these contests can expose you to other networks where you can source funding.
Starting an enterprise without the required capital can be detrimental to your startup’s growth. If you have a great business idea but lack the capital to get started, do not shy from trying the methods outlined in this post to raise funds.