Accessing funds for your business remains one of the biggest hurdles to cross when planning to launch your small or medium scale business. Some do say it takes courage to make your dreams come through. I agree to an extent, but let’s be honest. Without money, your courage will be stranded! Some dreams need not just courage, but money to become a reality!
That’s why entrepreneurs lookout for initial start-up capital to kick start their dream business. To be honest, there are millions of people out there whose dreams of achieving financial freedom have become stagnant due to the lack of start-up capital. We all need the courage to pursue our dreams, but money is like a fuel to take our dreams to its place of destination!
One of the most difficult stages in turning your idea into a tangible business is that of funding. There are however several sources of funding one can explore and possibly utilize when starting up a business.
It makes logical sense to start from home. If you are serious about starting up that business of yours, then you must have worked out a plan about saving up for the business. You can never rely on other sources of funding when you don’t have a dime saved up for the business.
The best bet is to open a savings account and start saving before launching your business. It takes a lot of guts and self-discipline to save up. Try to maintain a certain standard which will require you to save a minimum amount monthly.
Friends and Family
Friends and family are the nearest sources for funding your business. You must have saved a tangible amount of cash before approaching them with the proposal for funding. More than 80% of family and friends would want to know the type of business you plan to start and also how much you’ve been able to save up for the business.
Be ready to answer these and more of their questions. One major drawback with this option is the fact that family and friends may want to interfere with your running of the business when they eventually lend you some funds.
Angel investors are more like business-minded individuals who look out for potential businesses they can plow their funds into. In return, they get a percentage of share in the business. They are usually involved in more than one business, so if you are looking for a huge capital to start up your business, angel investors may not be the best option for you.
Banks should be your last port of call. They are generally willing to give out loans as long as they can confirm your business has potential. Be ready to check up on the different banks to compare their loan conditions and the interest rate on the loan.
All banks have their conditions and rate when it comes to granting loan facilities to entrepreneurs. Remember, having a good idea is not enough. You must be able to come up with a workable business idea. These are the things that would be required from you when you approach any bank.
Print out a copy of your business plan and if possible have a slide ready for presentation. The business plan must be practicable because no bank will be willing to invest in any business that may not yield any return on investment.
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