You’ve been dreaming of starting your own venture for a long time, and now, you’ve finally decided to make the leap. After all, it’s 2020—the start of a brand-new year and decade to boot. There’s just one problem: You may be ready to launch a start-up, but your bank account isn’t.
In 77% of cases, entrepreneurs rely on their own funds to start their companies. However, if you’re lacking in funds, or if you want to grow your company more quickly, it pays—literally—to look for other viable funding sources.
Let’s take a look at how to get funds for your start-up this year.
One of the smartest moves you can make when it comes to funding your start-up is to go to your inner circle first. In other words, you can ask family members if they would be interested in funding your entrepreneurial endeavor. Friends may also be willing to support your dream by lending you money.
You may be tempted to attempt building your business from scratch. However, the reality is, success doesn’t have to be concocted in a vacuum; it is okay to ask for help from your current support network. After all, your network may be the first people to believe in you and in your business idea. They may also serve as an excellent target audience for your future start-up’s offering.
Another benefit of going to family and friends for funding is that they may not be as micromanaging as an investor would be. In addition, because you personally care about them, this may motivate you more to bring them a nice return on their investment in your start-up.
Don’t forget that the government may be another helpful resource for funds for your start-up. That’s because the federal government offers grants or loans for people interested in becoming entrepreneurs. The government is motivated to help businesses because they help to spur economic growth.
Grants and loans are especially available for individuals under 35 and those interested in getting into the technology or science field. In addition, your own state or city could have its own loans and grants available for aspiring entrepreneurs.
Using crowdfunding platform has become an increasingly popular method for start-up creators to fund their start-ups. Crowdfunding is where you have several people back your business by each giving you a small amount of money. Depending on which platform you use, your backers may not always have a say in the way you operate your business. However, they all share a little risk by being a part of your project.
However, executing a thriving crowdfunding campaign is both an art and a science. It takes a great deal of work and investment, but if you master it, you can be well on your way to landing the cash you need to jump-start your start-up.
Investors are usually wealthy individuals who control pools of assets and invest their money in business projects. If they choose to invest in your start-up, they’ll expect to receive shares of your business in return.
Although obtaining money from investors can be financially helpful, you will have to fulfill their expectations regarding how you utilize their money. For instance, they likely won’t want you to spend their money on business items you don’t truly need. Instead, they would rather see you use it to expand your market share by marketing your business.
Also, an investor will expect to receive a return on his or her investment within a given period. For instance, you may need to focus on delivering 10 times the investor’s initial investment within a five-year span. This can happen if you sell the company or end up going public.
Finally, you may want to take advantage of accelerator programs, particularly if you’re seeking to create a technology startup. An accelerator program’s main focus is to drive business growth during your company’s early stages. In the program, you’ll likely be given both office space and mentorship opportunities.
A benefit of this type of program is that it is designed to help you to get through a particular business growth stage as speedily as possible. In addition, you’ll find that accelerators are passionate about developing not only your business but also you as an entrepreneur.
Still, as a whole, accelerators are quite competitive, so getting into them can be challenging. Also, the process of going through such a program is grueling. After all, these programs are much more rapid compared with incubator programs, which take several years to complete. Note that some accelerator programs are broad, whereas others are more focused on certain industries.
Creating a start-up can be a great deal of work, but it can also be rewarding if you take the proper steps, including obtaining adequate funding early on.
If you’re specifically interested in creating a nonprofit organization, the great news is that this involves many of the same steps associated with starting a for-profit organization. For instance, in addition to funding your organization, you’ll have to develop a strategic plan, spearhead marketing, and handle web design and accounting, among other tasks. Enlisting the help of a consultant can help you in completing these responsibilities.
Fortunately, CharityNet USA has a wealth of experience in helping nonprofit organizations to get off the ground. For starters, the company is adept at the incorporation and the 501c3 filing process, according to Brian Davis, who has extensive experience in entrepreneurship, business leadership, and helping aspiring entrepreneurs to achieve their objectives. CharityNet USA has already helped more than 30,000 nonprofits with its 30-plus solutions and has attained a 97% satisfaction rate over a 15-year span.
Start employing the steps above to obtain both funding and sound advice for your dream organization. In no time, you can put it on the path to financial success long term.
Katie Tejada is a writer, editor, and former HR professional. She often covers developments in HR, business communication, recruiting, real estate and finance, but also enjoys writing about travel, interiors and events.