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Your business idea is great and you’ve drafted the perfect plan, one thing is left which is the money capital to start. Whether you are new or old in the business, you know getting money to start a business is not that easy. Because we have great minds that are financially broke. Here are 5 common ways to get money to start your own business, either big or small. I have been there and I understand your struggles.
5) LOAN(bank): Not the best to raise capital for a business in my opinion
If the sources I will be recommending were going to be a hundred, bank loans will still be the last option. However, it is a good option depending on the business you are starting. A big business with good and fast returns. For example oil and gas, until the day our machines stop working on gas, gas will be in high demands all over the world. The only reason bank loans are not the best is simply because of their interest rate.
How about the collateral thing? That’s scary to me. I don’t doubt my business, but some business thrives better in the long run than the short run. So how will you keep up with paying interest rates when your profit is still on its way. This is not to discourage you and since I put this here as a source then it can work for you. Just be sure your survey is perfect and your business big or small is ready to thrive.
World banks like Bank of Industries(BOI) gives loan with lower interest rates not directly most times. But your business plan has to kill it and be worth their money and attention. Mostly bigger projects land these loans.
Some of the entrepreneurs I know started their business with a family loan. I will give you two examples. The present US President Donald Trump is a well-known entrepreneur, businessman and a billionaire. His father loaned him one million dollars to start his own business. Aliko Dangote is the richest man in Africa and the 23rd richest in the world according to Forbes. At a young age, he got a loan of five hundred thousand Naira from his uncle to start his business. At that time five hundred thousand Naira was big money.
Anyone from your family can loan you money and it mustn’t be in millions. Just enough to start you up. My dad has loaned me money before to start one of my small businesses. Loaning from family might look easy but it comes with big responsibilities. They have to trust you enough to give you a loan. Don’t think you can mismanage the loan just because it came from family. You will just ruin your chance of getting more in the future if the need arises.
3) GET GRANTS: Through Investors
Grants come in different forms you just have to become a good grant scout. It could come from the government, organisations or individuals. Getting grants is not always an easy task because it is very competitive. Most times these organizations ask you to submit a very good business plan and answer some questions, it’s almost like a job interview. Not forgetting you are not the only one submitting an application. This is where the competition comes in because they have to screen and choose the best application. However, a grant is a great source of financial capital.
Another form of grants I know is when an individual mostly investors love your business idea and plan and is willing to give you the complete capital to start your business but on one condition. which is to own some percentage of the business of which you can negotiate. For me, grants are a win-win either way. Have applied for some myself and I’m waiting for a response.
This is my second most favorite way of raising capital to start a business. Some people are lucky to have a good paycheck that can allow them to invest in a business or start-up one for themselves. If you are one of those few and you are reading this post count yourself lucky. However, if your paycheck is not that good enough you can save your income to start a business. Apart from using your income to start a business, you can also turn your hobbies into your income. Learn all about it here.
1)SAVING: You can save to raise capital for your business
In other not to put too much pressure on your paycheck either big or small. Saving can come in handy to help you start this dream business. It is a gradual process that will give you time to plan and create a good strategy. There are numerous ways to save ones income but you can find the best easy to do way here. Three ways to save your income that works.
Saving has helped me start a business and I am currently saving for a new business project. Heck yes, I’m an entrepreneur therefore there is nothing I don’t do or risk I don’t take to start a new business and make investments. It is safe to save for a business because you have no debt which makes it easier to bear a loss. Or will you rather have the bank round your neck and you can’t settle them?
Lets run over everything quickly
Save and start a business it is safe that way.
You can definitely start a business with your income.
Grants are hard to come by but great when you get lucky.
Trust and responsibilities comes with a financial capital from the family.
The bank is not a bad place but the interest rates can give you a heart attack.
Here are the effective ways you can raise capital to start your own business.