It takes more than a good idea and some interested customers to get a business off the ground. Entrepreneurs require funds and profits to keep their business going beyond the first year. If you’re expecting, or hoping, that your new small business will replace your employment income, you have to make money your first priority. Money will pay for the initial costs of running a business; such as hosting and designing a website, rent on a new premises, and marketing costs. Money will build your business, so here is how you can start earning it as soon as possible.
Perhaps you’ve been really lucky with your investments, or perhaps you’ve had a well-paying job for several years and you’ve been smart about saving money. Either way, it’s great when you have enough of your own funds to start launching your business; you won’t have to pay anyone back, and you can keep all the profits instead of spending it on interest.
However, it does mean that you won’t have a financial safety net if any accidents happen.The best option might be to use half your savings for the business, and find alternative funding for the rest.
Usually, loans are only a smart idea if you need to buy more inventory or equipment, if you’re looking to expand your business, or if you’re hoping to hire fresh talent. However, loans do come with their own benefits. You can have additional funds to get started right away, and if you are looking for cashflow finance you’ll get it more easily if you already have some sort of business history with your bank.
You should bear in mind that borrowing money is not an ideal solution for poor profits; if you’re having trouble selling your products, you need to increase your sales or you’ll just end up in more debt.
If you have an idea that you feel has a lot of potential, then someone else might believe it’s a worthwhile investment. In the past, you might have had to pitch your idea to the appropriate businesses, but now anyone can reach out to Angel Investors regardless of your target market. A business angel can be an acquaintance, a former employer or someone you’ve found through a funding network.
There’s no hard rule other than that this kind of funding involves an individual or group that offer cash in exchange for a share of the business. Sometimes they take an active role in the venture and sometimes they act as silent partners.
Even if established businesses aren’t interested in your product, that doesn’t mean the general public won’t see its potential. Donors on crowdfunding sites, such as Kickstarter are typically private individuals providing small sums, so they’re unlikely to give you the sort of grilling, and rigorous conditions, an angel investor would. You can also use this as research to see whether your idea is as popular as you believe, and see which market shows the most interest.