Start-ups and small businesses are a boon for any economy. They reduce the rich and poor divide, encourage innovations, generate employment and income, boosts purchasing power in individuals and keeps the economy fueled and functioning even during rough times and economic downfalls.
As small businesses continue to gain importance in the economy, acquiring funds becomes simpler for small businesses and start-ups. Ideas get wings and dreams turn into reality as the funds start flowing in. However, it is not a smooth road, unless you have a large inheritance waiting for you. Thankfully since the turn of this century we have many organizations and individuals keen to pump in money into budding organizations and small businesses. Financial institutions remain a huge source for funding for small businesses. If you are about to start a business of your own, or already own a small scale business, here are some useful resources for you to raise funds and expand the business.
How Can You Acquire Maximum Investment for Your Small Business?
Angel Investors
The name itself reveals it all. Everyone begins somewhere. Some go on to climb peaks and mountains. Those who have very successful businesses have acquired a lot of wealth, and seek to reinvest this money back into start-up businesses. These are your angel investors. Angel investors are aware of the risks that come with the business. Yet they are willing to commit to the business financially and emotionally. Most angel investors were start-up boys at some point and so understand the functioning and obstacles that come in the genre.
Owing to this connect and need, many angel investing networks have been established that bring the entrepreneurs to the investors and vice-versa.
Having an angel investor has many benefits. Besides the pumping in of money, angel investors may often offer you valuable guidance regarding navigating your business and introduce you to some powerful and helpful people in the business word who can contribute lots to the upliftment of your business.
Twitter, Facebook, Skype, Google are all examples of super successful businesses that received angel investing.
Business Incubation
Obtaining capital through incubation is regarded by many business veterans as the smartest way to grow and expand a business. Incubation takes place through many ways. The small business may move into the actual physical space or office of their incubators, or it may operate on a virtual basis. Incubators have the required capital to invest and are looking for opportunities to jump start a business that is showing great potential.
Incubation is a good idea because it can give the much needed acceleration to your business. Most incubators have capital to invest and can also connect you to other financial resources. Besides as a start-up owner, you can also learn lots from the incubators’ experienced staff, and also employ your incubators’ resources to further your business.
Putting Your Own Assets to Good Use
Small business owners face many financial hurdles. Under such circumstances many decide to put their own assets to use to bootstrap their business. This may seem difficult, but can actually be a blessing in disguise.
Home equity loan and mortgages are ways in which you put your house as a collateral to obtain funds for your business. Few know that home equity loans can come quite cheap, and can also be incredibly flexible.
You could also use your assets to fund your business. Selling silver and gold coins, jewelry or an expensive car can help you secure the funds you require. You will find very competitive rates for your valuables, and once your business takes off, you can always indulge a little in your own fancies and desires.
Crowdfunding
Get on the bandwagon of innovation, creativity and enterprise by joining the popular crowd-funding sites like Kickstarter and Indiegogo. If you have an idea, these sites can give you the resources. You can raise your required investment amount through these sites. You can pool small investments from such sites from a number of investors, instead of depending on one major source of finance. Not only does this diversify risks, but you also get chances to raise a higher capital. Business can either give equity or share to the investors or can offer their products or services in exchange of the investment.
Venture Capitalists
A reliable and time-tested financing source, venture capitalists are especially good for businesses that are growing fast and have reached the break even stage. Venture capitalists are interested in short term returns and if you have a product or service that is taking the market by storm, you will receive huge amounts of money and interest from the interested venture capitalists.
If you have a strong strategy for your business and know you will be breaking the glass roof in no time, opting for venture capitalist funds can ease your finances and produce quick growth, excellent networking opportunities, and huge brand value for your business. As the venture capitalists are themselves interested in recovering their investment quickly, it is quite possible that they will give very valuable advice to you on developing and promoting your product and current market trends.
Family and Friends
Family and friends are an unexplored source of finance for most people. Borrowing from friends and family for your business can yield many benefits. Think no high interest rates of loan sharks, and no extensive bank documentation or collateral.
Keeping a professional attitude towards your family and friends can make an investor-entrepreneur relationship extremely profitable.
To Conclude,
With financing options becoming easier, and more accessible more and more people are daring to follow their heart, and start their own business. We also see a phenomenal growth in the small businesses and their role in the economy. Start-ups and small business are changing the business-cape rapidly and if you have a business idea that you believe in, you know where to get your investment from.
Photo credit: Pixabay.com
