How to fund your business
By David Nelems
When you have a business idea, funding is always one of the first issues you have to deal with. You’ve got THE GREAT IDEA but how can you raise the money to get it started? Here are the most common ways to get the money flowing.
This is the most common ways to get a business going. You finance it yourself. The money may come from personal savings, credit cards, or mortgages and lines of credit on your home.
Watch out for: If your business doesn’t succeed, you may have a substantial amount of debt that you now need to manage.
Friends and family
Borrowing money from friends and family is another common way to fund a startup as your family and friends often believe in your dream.
Watch out for: Borrowing money is a quick way to lose friends and sour family relationships. Be careful if you decide to proceed this way.
Trade equity or services
Looking to get some help? See if you can barter with your neighbor or friend who does some freelancing on the side.
Watch out for: Not everyone is willing to do it.
Small business grants
The SBA and other organizations sometimes offer grants to small businesses that are run by women, minorities, or veterans. If you fit into one of these categories, you definitely should look at this option
Watch out for: Check carefully to make sure you won’t need to pay the money back or agree to certain conditions down the road.
Small business loans
Some banks offer loans to startups, but it’s rare and can be difficult to qualify. There are alternative lending companies, however, that may be better equipped to help you get your business off the ground.
Watch out for: Make sure you know from whom you’re borrowing from before you sign on the dotted line.
If you have an idea and you’re good at marketing, crowdfunding might be an option. When websites like Kickstarter and Indiegogo first started, there were a number of businesses that had great success pulling together funding.
Watch out for: Lots of companies aim for crowdfunding, so you have to generate a lot of buzz to make it through the overall signal noise. Make sure you do not overpromise to potential backers.
David Nelems is vice president of innovation for the Don Ryan Center for Innovation. Founded in 2012, the center is a nonprofit organization dedicated to helping entrepreneurs succeed and innovative companies grow. It provides innovators with the space, the resources, the experienced guidance and the contacts to successfully launch and grow their businesses. donryancenter.com