A lot of people are looking at alternative ways to make a living these days. Some say it’s due to the changing outlook of the current generation. Some say it’s because of the difficult economic circumstances. Whatever your reason, now is as good as any time to start up your own business.
Of course, one big hindrance to starting up your own business is the funding. Not everyone has a distant relative who passes away and gives a considerable inheritance. Then again, you do not have to wait for this to happen in order for you to find funds for a start up.
Here’s a list of ideas which can help you find funds for your business start up.
Use your personal savings
If you’re the kind of person who has financial smarts, and you’re in your late 20s or early 30s, the chances are that you have saved up a considerable amount. If this is the case, why not consider dipping into your personal savings to give your start up a boost? The great thing about using your own money to fund your start up is that you do not end up owing anyone else – literally or figuratively. On the downside, it really is your own money, so if your venture does not succeed, then you don’t get to use your savings for anything else later on down the road. (But, of course, you do not enter a venture thinking it will fail, so go for it!)
Sell some of your assets
If your savings are not enough, or you do not have any savings, you might want to consider selling what you have. What you sell really depends on how much you need and whether or not you still have use for the items. Let’s say you’ve been keeping that piece of jewelry for the longest time and you never really use it, why not consider selling it? How about an extra desktop computer that is barely used? Little things like these can go a long way when they add up.
Another option is to get a line of credit based on your home equity. This will give you the benefits of not actually selling anything, but you still get some cash to work with.
Dip into your retirement savings
If you’re way beyond your early 30s, your retirement savings plan could be worth a good amount at this point. Much like the dipping into your personal savings idea, you can also tap into your retirement fund for some capital to start a business. Of course, you have to somehow make sure that you will replenish your retirement fund, even if in little bits and pieces, as you wouldn’t want to have nothing when you retire. In any case, when your business flies, you’ll be able to invest more in your retirement.
Approach a bank
That’s what banks are for – to borrow money from. (At least in many cases, that is.) You can approach your local bank and see what they can offer you in terms of a loan. It does not have to be that big – just enough to start your business and keep you afloat for a while. The downside: considerable interest rates and the potential to be denied.
Borrow money from relatives and friends
If you don’t like owing the bank some money, you might want to approach friends and family and ask for a loan. You do have to consider two things. One, they may not have the money to lend you. Two, borrowing from friends and family always poses a potential threat to the relationship. Still, it has worked for many people, and it can work for you as well.
Find a partner
One way to inject capital into a venture is to find a partner who has the means to fund it. Having a partner is different from borrowing money as a partnership implies responsibility on both your parts. Whatever is earned or lost in the venture, both of you will be accountable for it.
Keep your eye open for grants
Grants are a great way to source your start up. These days, the government and private entities alike are on the lookout for people who have brilliant business plans. You just need to have a concrete and feasible plan to present to the concerned groups, and you may apply for a grant. This is actually a good source of huge amounts of money. The only thing required on your part is to come up with great ideas that can work. Check with your local government and with NGOs to see what specific grants are available.
Keep your eye open for contests
Yes, I am serious. You can find contests all over the place wherein businesses provide cash prizes or prizes in kind. These contests target small business start ups, and while you may not be able to fund your entire start up using this method, you can at least have a little something to start with. And, it’s always fun winning in any contest anyway!
If you would like to go into sales, and you don’t have the capital to purchase products outright, why don’t you take a look at consignments? Perhaps the manufacturer of the product that you want to sell has a set up wherein you will not have to buy items; instead, you may be able to sell them on a consignment basis. This arrangement will certainly help you start your business without having to expend much cash.
Go freelance, work from home
If your business is all about service, then consider going freelance. Work from home, and look for clients. This kind of set up will not require much in terms of capital outlay. The chances are that you already have Internet access and the necessary tools to do your job. You don’t need a physical office at the beginning. Do your job from home and build up your earnings!