It’s one thing to have a vision for a startup. It’s another thing to get it off the ground. For most people, the issue isn’t determination or their commitment; it’s that they’re unsure of how to pay for their idea. While there are plenty of businesses you can start with little money, if you’re planning to Startup funding, then you’ll need some cash behind you. There’s a whole host of essential costs you’ll need to pay for, after all.
In this post, we’re going to take a look at the different Startup funding methods available to you. You may use one of them or a combination, but the bottom line will be: you’ll have money to spend on your startup.
Here are some easy methods for startup funding;
1. Your Savings
If you’ve got savings, then you may have everything you need to get started with your startup. There’s a lot of value in using your own money to fund your blossoming startup. For one thing, there’ll be no waiting time. Plus, unlike Startup funding via investors, you’ll retain full control of your company. The downside is that you’ll be putting your savings on the line — if your startup fails, then you may have no cash reserves to see you through.
2. Friends and Family
You may also consider asking your friends and family for money. If your parents have done well for themselves, or at least have some extra cash in the bank, then they may be willing to fund your startup. This is a good approach because it (usually) means you can avoid paying interest. How you pay your friends and family back can vary. You may pay the money back over time, or you may offer them equity in your startup. It’s highly recommended to outline the terms of the lending before you accept the money — even if you have the best relationship with your friends and family, don’t underestimate how much potential money has to create problems.
You may also consider opening up your startup to investors. The process of getting this type of Startup funding can be more challenging than getting it from, say, your family members, but it normally allows you to access more money. You’ll need to put together a comprehensive overview of your business idea to present, and it’s recommended to look up the essential side letter terms to know before you strike any deal. Doing some background research on your potential investors can also save you a lot of headaches further down the line.
4. Small Business Loans
Most startups with a small business loan. This is a popular method because it allows you to retain full control of your startup (you will give away equity if you use investors, for example). Plus, you can usually access considerable amounts of cash. The downside is that you’ll need to start paying back the loan — with interest — immediately, which can be challenging for startups that haven’t yet got a loyal customer base. It’s best to look at online small business loans, rather than ones from traditional banks.