Are you thinking of starting your own business? No 10
April 4, 2021 Published by Thomas Cullen
How do you start a business with a minimum amount of money?
There are also a lot of businesses you can start with almost no money at all.
Listen to the following YouTube video if you need help raising money:
Why do, many people decide not to go through with their business idea? The reason is simple they think it is too expensive to start working for yourself, fear of failure, and the risk of losing your investment in your own business. It is true that some businesses require a huge investment right at the beginning.
Coming up with a business idea is just the beginning.
Then it is time to be extremely realistic about considering the following:
- Things you want to do with your business idea.
- What you are good at?
- What you can do alone with no help whatsoever and slowly start scaling?
- Consider is it the right time for you and your idea?
- You must start small, but it is OK to think big.
- There are also a lot of businesses you can start with almost no money at all.
You should take the time and research the market to see what is in demand and what is not.
- What are your prestart, start-up, and working capital requirements?
- The costs of running a business can be overwhelming at times, so keep your fixed and recurring costs to a minimum.
- If you are not skilled in any of these areas, you must seek help and guidance.
- You must set realistic goals within your budget.
- Do as much as you possibly can yourself before paying others.
- Build a professional team of advisors e.g., accountants.
- In most cases, it is not difficult to start a business the secret to success is research and planning.
Use Technology as much as possible from the “get-go” i.e., internet and social media
You must have a responsive, functioning, flexible website which has the capability to build on in the future so some templates will not be what you need. Nowadays, it is extremely easy to set up your website and offer your services so people can see them online.
- Ranking your website to be number one on Google is a long-term process.
- Take time out to upskill your knowledge of Search Engine Optimization.
- You should also use business directors to link your site to.
- Seek out reasonable priced or free facilities to create an optimized website.
- Social media is also a great way to improve your visibility.
- Slowly build your business by improving the quality of your product or service and the technology you use, or by investing some of the money you earned in marketing activities.
What is required of you? Stamina and commitment are an absolute requirement in the early days of your start-up.
- Do not take your foot off the accelerator pedal.
- Constantly focus on money and financial controls.
- Reading success stories from around the world about how someone made the huge step of starting their own business can be inspirational and help you avoid mistakes that they may have made.
- Running your own business takes a lot of time and courage and you need to think about every move you make when it comes to your business finances.
- You need to be strategic about growth, finances, and profit so you will be able to achieve both your short-term and long-term goals.
Important tips on how to raise funds for a start-up business:
Over the last decade and following the financial crash early in the millennium, many people have been under financial pressure. At the same time, there has been an increase in the demand for small businesses start-up funding, thus financial resources are extremely competitive. At the same time, many existing businesses are seeking finance to increase their productivity by expanding their capacities.
Greater numbers of people are considering starting their own business this may be as high as one-third of the population. As the economic impact of the COVID19 pandemic bites there will be a surge of people starting their own business further increasing the demand for business finance. At the time of starting a new business, you will have to make an investment if you expect to get finance from others, it is a sign of your commitment.
Now we will consider some practical tips to help you raise the finance you may need when starting your own business.
What is required is an obvious and sincere passion for your business.
An area where you need to fine-tune is your pitch when raising funds for your start-up, you will have to keep on pitching to potential funders time and time again. This is one of the hardest tasks that you will have to do as an entrepreneur. Keeping your passion in the face of rejection is a test that you must pass. The funders need to know what keeps you motivated while building your business.
Look at the online lenders
If you do not want to raise a large amount of money, you can look at online lenders. This is an option for small amounts of money that are always helpful, and you will get the chance to borrow the funds needed as the capital for your business start-up. However, interest rates can be penalized, so you need to give this option serious consideration before you borrow.
You do not normally need to pitch your business idea to them. You just need to submit the online application and provide a small amount of information as they request. Be careful when you are using online lenders and check them out thoroughly before signing on “the dotted line”.
Make sure to read and understand the terms and conditions of lending. Then you can proceed with borrowing the amount of money that you need to get your start-up up and running.
Crowdfunding is also an option.
Crowdfunding is a popular method of raising capital that entrepreneurs use for start-ups. If your business is backed up with a great business idea, you can go ahead with crowdfunding.
A focus of crowdfunding is often innovation that you can highlight. You just need to showcase the innovativeness of your product or service and highlight the benefits, features, and advantages of your product or service. Then you will grab the attention of potential crowdfunding investors and get them to contribute towards your business capital.
Apply for a start-up accelerator or business incubator program
The objective of a start-up accelerator program is to provide guidance to a business start-up is to provide the impetus and in some cases funding to move the business forward in a structured goal-driven direction and take it to the next level.
Most of these programs provide an invaluable resource i.e., mentoring from experts, who will provide guidance and wisdom to take their businesses to the next level with reduced risk. Check out which such programs are available in your area that is pertinent to your business type.
You can get money from your friends and family members.
This suggestion comes with a health warning in that if you cannot pay them back you will be left in at least an embarrassing situation. Yes, share your business idea with them through a robust business plan and let them decide to invest if they so wish. In many cases they can become your “business angel” but again caution here, treat their opinion as you would that of any other investor.
Your friends and family members may come forward and support your business idea. Thus, this is one of the most convenient ways available to raise funds for the business start-up.
Raising business funding is never easy and always challenging because it is several questions to answer, can I raise the funding, how much will it cost, can you pay back your borrowings and how long will it take to pay back. The truth is that in order to be successful in any business venture, the basics of finances must be included in the business plan. Be careful with your financial projections, they must be reasonable and can be validated with thorough research.
Other businesses may be willing to lend to you.
If you want to borrow from another company like all other investors, they will be looking for proof of the following key issues.
Is the business:
Ø Feasible, can you do what you propose doing, is there a market what are your financial projections.
Ø Sustainability, what is the likely life span of the business, will it survive the first 5 years.
Ø Scalable is there an opportunity to capture a significant market share
Ø Likely return on investment
Lastly build relationships is critical in raising finance
Raising funds takes time, you must plan at least three months in advance. What is paramount is that you can articulate clearly and succinctly what your business idea is and how you can pay back what you borrow and make money Before you apply for funding research exactly what the funder requires from you. You may have to fundraise for several years so be prepared mentally to accept this. As part of the fundraising, you may have to give a level of equity/ownership and this should not be an emotional decision but a hard-nosed business rational decision. If you do raise funds it is critical that you honestly keep the funders informed as to business progress based on the goals that have been agreed upon.
Visit the below video for advice on start-up business finance:
Thomas Cullen Founder and C.E.O, www.sherpha.com
Looking forward to hearing from you, book a free introductory online mentoring session
Copyright March 2021
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