When beginning your startup, the initial hurdle to overcome is securing the funds needed to get it up and running. There are many promising entrepreneurs with brilliant plans, only for it to not end up materializing because of funding.
While entrepreneurs can apply for funding and contact venture capital funds like Clean Venture, this is only the first step. You need to know what to show to financial institutions and investors to receive the funds and achieve business goals.
Here are some tips you can follow.
- What’s Your Financial Standing?
When you start a business, you need to invest in yourself, not just emotionally and physically, but financially as well. However, only invest what you can lose, rather than everything you have.
To do this, perform an audit to identify your current assets and debts. Afterward, set aside a portion of savings to invest in your startup, making a plan on how to secure the rest of the finances required.
Once you know how much you have and what you need for your startup, list down your financing options. Here are possible sources of funds:
- Friends and family
- Crowdfunding websites
- Angel investors
- Online lenders
- Bank loans
- Prepare Your Plan of Attack
Once you have contacted investors and financial institutions, you will need to present your business plan to them. Take note that they will take you as seriously as you would take yourself. So if you don’t plan ahead well enough, then you might lose funding opportunities.
To prevent that from happening, create a detailed and well-thought-out business plan. Conduct deep research as you create your plan, learning the ins and outs of the industry and business you plan to get into.
You need to be very knowledgeable about your business plan and the industry to the point you can confidently talk for hours about it! The more time and effort put into planning, the more likely lenders would want to take that opportunity and invest in you.
Besides your market research and competitive analyses, include these in your business plan:
- Motivate investors to learn about your startup more
- Educate on the opportunity and prove why it is worth investing in
- Define the business’s short-term and long-term strategies
- Be transparent about your current financial situation
- Be Creative With Resources
Once you do have the funds for your startup, be resourceful! Even if you received more than enough, make sure that you find ways to save money and cut costs, so you can end up earning more in the long run.
Find deals on the supplies and equipment you need, negotiate on the rent of warehouses of the store location, and even work on decorating advertisements or space yourself! This will allow you to spend the funds on more important things, or to save the funds in case of emergencies.
While it may be daunting trying to find a way to gain funds for your startup, it isn’t impossible. There are many creative options, so start by following the tips above and receive resources that can kickstart your business journey.