Money, money, money! Let’s admit it, money is one of the reasons why many people want to have their own business…and of course the freedom that comes with it! The freedom in finances as well as time!
The challenge lies in the fact that money begets money! How ironic, isn’t it? In order for you to make more money, you need money! Yikes!
I guess that can be fun right? Even if it’s not, it’s just the truth. (LOL)
Before I get into the funding ideas…three tips about business finance I would like to share with you:
1. Ideally, when you get into business, you would want to have savings and use part of it to fund your business.
2. Avoid credit card funding at all cost (although there were some that have successfully funded their business using this method). One thing you have to remember is that when you’re starting up or even if you’re already in business, if you have no business credit, banks will require your personal information in your business credit card application. They require personal guarantee which means you will be responsible for any charges incurred on that card, regardless whether they are business expenses or not. In order to get approved, you also need an excellent personal credit rating.
3. Avoid debt/loans period!
I am by no means a business finance major to be an authority in this area. One thing I can tell you is that debt is like a sinking sand. It’s easy to accumulate it but hard to get out of it! When you’re starting a business or trying to take it to the next level, the last thing you want to do is to increase your revenue only to pay off the debts you accumulated!
With that said, here are some ideas to raise funds for your business:
1. Sell Your Unwanted/Unused Things
Take inventory of your household. One hundred one percent of the time, you have books, DVDs, CDs, clothes, electronics, appliances, decors, etc. that you don’t want or need but other people might want or need. You can turn them into cash either through eBay or other online auction sites, craigslist, or just the good ol’ garage sale right in your neighborhood!
Do not be afraid to also ask friends, relatives, church mates, and colleagues to donate their unwanted goods. Nine times out of ten, they have something to give that you can turn into ka-ching. Just simply ask!
2. Conduct a Raffle Drawing
Find around three businesses in your local area or (online if you are an online business) that would like to donate prizes that have high-perceived value in exchange for you advertising their company name on your website or blog and on the raffle tickets for a certain period of time.
Without any cost on your side except the ticket printing, you’re able to raise funds for your business! Depending on your prizes, you can sell the tickets for $15-$25.
Some ideal businesses to approach: Travel agencies, Spa/Beauty Salons or Massage Clinics, Restaurants
3. Cash For Gold
Ever heard of this or seen one of those commercials on TV? Yes, it’s true, you can turn your gold into cash! Gold is at all time high and it just continues to rise. If you have gold jewelries that are broken or just sitting in your jewelry box, you can use them to invest in your business for the meantime.
Gold buying is actually my side business. The father in law of a friend of mine brought me some gold cufflinks with a logo of an organization they belong to. Not knowing what it’s worth, he was surprised that I paid him almost $500 for his cufflinks that otherwise were just sitting on his drawer unused!
He ended up bringing another pair from his colleague and I paid a little bit more because at that time, the gold was higher!
So dig your jewelry boxes and find a local trustworthy company that buys gold.
4. Put Together a Small Scale Local Expo
Find an outdoor area (like a church parking lot) or a small hall that you can rent out for a small fee. Invite other local or home-based businesses to exhibit/sell at the expo for a certain amount or ask for a percentage from their sales. The prior is a better idea. In addition, for those businesses who do not necessarily want to exhibit (such as restaurants), you can ask them if they would want to advertise at the event. This kind of event should not have a lot of overhead expense. Printing of flyers are inexpensive or you can even find a printing company that can sponsor the flyers with their logo on it.
5. Conduct a Seminar/Workshop
Each one of has something that we’re really good at. We’re equipped with a knowledge that others would want to know. Find out what that is and conduct a local workshop/seminar in your community for a small fee. Talk to your local chamber of commerce and see how you can partner up with them. Again, the promotion of this is inexpensive. Flyers and working with joint ventures or sponsors should help you get this advertised.
If you do Ideas #1-5, there’s no reason for you not to raise funds that you can use for your business!
Now if you have greater funding needs…check out #6 and 7 below.
6. Find a Joint Venture
Do you have the skills or product idea but don’t have the money? Find a colleague, friend, or relative who is financially able and who might want to partner up with you for a certain percentage of the business. Perhaps your business would compliment another local business, don’t be afraid to approach them and present your idea and your offer and see how you can mutually benefit each other.
This is not a common practice but it’s also not uncommon. I have heard of two classmates in college and were going to start a technology business. Just in time before graduation, they asked their classmates if they might want to invest a certain amount. Surprisingly, the students were so eager to be a part of it even if they were not the ones starting the business.
Again, it’s all about asking. There’s nothing to be embarrassed about making an effort to fund your dreams! Friends, families, relatives – those who are true to you and support you would be eager to help you with whatever they can! Hey, any little amount can add up when you put them together!
Just be sure that you know how to present your case. Be prepared with your ideas, your elevator speech, your vision, your goal. Each of these matters when you’re trying to convince someone!
Of course, there are other ways to fund your business without getting into debt…it’s not so creative and it’s a little complicated process – Finding an Investor or Angel Investor. This takes having a unique or profitable product that can investors see can yield a high return on their investment. The process is tedious because you require a great business plan and you will have to go through several elevator pitches. On top of that, in order to get access to these investors, you usually have to join a company that offers this type of service for a certain fee. However, if you have an invention or you believe your product is unique and the market is untapped, this is one of the best option.
Have you been able to raise funds for your business through a creative method? Feel free to share them below and don’t forget to “like”, digg, RT and jump, turnaround, and clap your hands while you’re at it! OK…just kidding!