After telling your boss to go to – well, you know where – and coming home to explain to your wife what you had just done, you sat in your man cave and processed both reactions: your boss was shocked and your wife was seriously mad.
You’ve got this, so you assured her. But, is that really the case?
Yes, you have a wonderful business idea that will surely take off, but she brought up a very important point:
How are you going to finance it?
Don’t fret as we share with you the best tips on financing your business.
People invest in businesses every day when they purchase stocks, but you aren’t ready for your initial public offering just yet. You need somebody who is willing to put his or her money into your idea, which is an entirely different beast.
Your first step is to write a business plan that details your idea. You will be asking people to give up their cash, so you must keep this in mind when you write your plan. Think back to your business courses in college.
You likely learned that there are many sections of a business plan and all are important. You must include an executive summary first that briefly encapsulates all aspects of your vision. Next is your company description which should include your corporate set up and business goals.
After that, describe in detail your product and/or services and how they will make money. The fourth section is your marketing analysis. Section five should explain your business startup and growth strategy and how you plan to implement it. Sections six and seven, meanwhile, are your management and financial structures, respectively.
Investor options include angel investors, crowd funders, and – believe it or not – your competition.
Angel investors are wealthy people willing to put their own money into business ventures. Some will put a ton of cash into a new venture while others will invest just a tiny sum. You can have one or many angel investors banding together and forming a group.
Angel investors do more than just give you moolah; they can also take a stake in your company which means they will expect investment returns. Many will take a management role, too. They can give you crucial advice while you’re still starting out.
For the independent entrepreneur who doesn’t want anyone else involved in managing his startup, crowd funders are another option. It leaves you 100% in charge.
Just like GoFundMe, there are a lot of available online crowdfunding websites for businesses. You will need to find a website the best one that can help you raise money. Remember to be realistic about this financing option.
While there are success stories about people reaching their funding goals, they don’t mean you’ll surely experience the same thing. For you to be successful, your plan must be full proof and others must become impassioned by your idea.
The benefit is this money is yours to keep with no strings attached. This is another reason why so many business startups try crowdfunding.
It doesn’t hurt to try. Even if you don’t reach your goal, you may still receive donations which you can use for your startup and for networking with others in your niche. This can bring you to investment by your competitors.
That isn’t as far-fetched as it might sound. Many people in your industry might be interested in giving you a helping hand. Competition is healthy and when you’re on your feet, you can divest out and be on your own. Don’t forget about microloans and grants, either.
Growing Your Entity
Once you are up, running, and turning a profit, think about venture capital to grow your business to greater heights. Venture capitalists are people who invest in existing entities to give them the boost they need to reach their next plateau and then go beyond it.
Many people think that venture capitalists only invest in technology companies, but this isn’t the case.
Many businesses receive funding from VCs, as they’re called, including biotechnology and other science companies, food service, retail, and beyond. Companies such as Amazon, Starbucks, and Uber have taken advantage of VC financing in the past, too. Chris Sacca is one venture capitalist who helped put Instagram and Twitter (among others) on the map. Born in Lockport, New York, Sacca founded Lowercase Capital which has had its hand in financing and managing numerous businesses.
Experts in business growth, Sacca and his team helped owners design and implement growth plans. And when you look at Sacca’s record, you’ll realize VC is a wonderful tool once you’re established. It’s full of visions which are usually successful.
Your wife will calm down eventually and you don’t ever need to worry about your boss again. In the meantime, write a comprehensive business plan and seek out the money you need to get your venture off the ground. There are plenty of financing options available whether you are just starting out or planning your growth. So, keep your mind open and good luck to you!