There are many easy ways to raise capital for your small business. The choice you make will determine, to a great extent, whether or not you'll succeed. Experience has shown that money-sourcing is not without a risk. This is why learning the basics of anything, including how to raise money is important. Once you identified and decided what type of business you're passionate about, next is find money to start it up immediately.
Basically, sourcing for the required capital for your business can be challenging. This is so because, at the point of raising money, majority of the people give up on their dreams. Developing success attitude towards business is very important. Entrepreneurs don't give up on their visualized dreams no matter the challenge, until those dreams are finally actualized. But not to worry, I'll show you easy ways you can raise cash for your small business without getting stuck in the mud.
Basically, sourcing for the required capital for your business can be challenging. This is so because, at the point of raising money, majority of the people give up on their dreams. Developing success attitude towards business is very important. Entrepreneurs don't give up on their visualized dreams no matter the challenge, until those dreams are finally actualized. But not to worry, I'll show you easy ways you can raise cash for your small business without getting stuck in the mud.
1. Personal Savings
The easiest way to source for funds for your small business is personal savings. It's an individual responsibility. It's the best way to fund a star-up, as there is little or no risk involved. If you want to finance your new business by yourself, keep a certain percentage of what you earn as income every month. In 'The Richest Man In Babylon', George S. Clason said, ' A part of what you earn is yours to keep'.
Personal savings is money set aside personally for future use. You can maintain a personal savings for the purpose of starting a business. This however, may not be achieved over-night. Personal savings puts the entrepreneur in a more relaxed state of mind than borrowing from external sources.
2. Asset
An asset can be the means through which your business can take off. It can be a good source of financing your business if you sell it. I recall how selling some of my shares aided me in purchasing a laptop for internet business. At which time, there was no money on me. It can be your best bet if you want to raise capital fast for your small business. They're easily converted into cash.
Assets are categorized into tangible and intangible assets. Tangible assets refer to assets that can be touched Examples include cash, building, land, equipment, etc. Intangible assets are those assets that can't be touched. The latter is the opposite of the former. Intangible assets are by their nature and value, long-term resources of a business entity, and are very difficult to evaluate. Examples are goodwill, patents, trademarks, copyrights, etc.
Assets are categorized into tangible and intangible assets. Tangible assets refer to assets that can be touched Examples include cash, building, land, equipment, etc. Intangible assets are those assets that can't be touched. The latter is the opposite of the former. Intangible assets are by their nature and value, long-term resources of a business entity, and are very difficult to evaluate. Examples are goodwill, patents, trademarks, copyrights, etc.
3. Friends And Relatives
One common way to finance your business is borrowing from your friends and relatives. But it's important you apply caution. Be sure there's an official written agreement or at least, a promisory note, wherein is stated clear repayment terms.
It's common knowledge that people fight over money often times. Even in law court, suits are filed against a person who breaches a contract to pay back money. Don't take borrowing for granted. "Better a little caution than a great regret'- George S. Clason".
4. Borrowing From Bank
A good business plan is crucial to borrowing from banks. It helps the management know the prospects or otherwise of a business. Whether or not your loan application would be granted, depends on it. It must state clearly the nature of business, viability, market, sources of income, how to repay loan, etc. Note that no bank is willing to offer credit facility, except for what it stands to benefit.
However, borrowing from banks can be risky. You've got to develop the ability to withstand unforeseen risk if it arises [and most of the times it does]. Borrowing can be likened to closing one financial hole and digging another. The hole remains!
On the other hand, some top wealthy businessmen have become successful through the use of other people's money. While you may be thinking whether or not borrowing is good, it's striking to note that some people obtain credit facility to invest. Others do so for mere show-off. But smart entrepreneurs use others' money to grow their businesses.
5. Bank Overdraft
This is a credit facility given to a bank's customer in excess of his deposit. Interest is usually charged for over-withdrawal. Overdraft is an easy form of credit to help you jump-start your business without going through the headache of taking a loan. It has a fixed period within which repayment is made.
This is a credit facility given to a bank's customer in excess of his deposit. Interest is usually charged for over-withdrawal. Overdraft is an easy form of credit to help you jump-start your business without going through the headache of taking a loan. It has a fixed period within which repayment is made.
6. Government Grants
This is another easy way to source for funds for your small business. Government may decide to give financial assistance to small scale business enterprises to encourage them succeed. Such businesses must impact on the lives of the citizenry, otherwise the government won't fund them. Grants are free monies which are never repaid. But before money is released, the government commits you by asking you to provide guarantors.
7. Co-operative Society
The co-op is an organization of people of like minds coming together voluntarily to jointly own a business. Their resources are usually pooled together for their own mutual benefits. They may engage themselves either in production or distribution of goods/services. Management of this organization is democratic and members participate fully during elections. Their proceeds are shared equally among themselves. Co-op can be classified into Producers' Co-operative Society and Consumers' Co-operative Society. As a member of co-operatives, borrowing is easy and without interest. This can be a good source of funding your start-up.
8. Money Brokers
If you've a business you want to start, it can be funded by individuals or organizations that are willing to assist you. The money broker connects you and the lending organization. He is paid a commission at the end of the deal. You can become a money broker today and earn huge fees that can easily help you raise cash for your small scale business.
9. Informal Investors
They're the 'Big Boys' who are willing to invest in your small scale business. They're sometimes called angel investors. This wealthy class of investors are looking for your business to invest in.
10.Credit From Suppliers
This is a credit arrangement whereby the supplier[creditor] and the purchaser[debtor] enter into mutual agreement of give and take. The money is received by the purchaser to pay at a later date to the supplier. Trust is the greatest ingredient here; and once it's abused the supplier may decide to terminate the contract for fear of losing money.
Finding money to start your small business isn't rocket science. It's possible and achievable. 'As a man thinketh in his heart so he is'. All that's required is your ability to step up and take action. Entrepreneurs take the bull by the horn. Fear isn't in their business vocabulary. They know that it's riskier not to take a risk in life and that's exactly the reason they succeed. Regardless of the financing platform, applying what you've learned is only appropriate otherwise it will not hold.
To your success!
ABOUT THE AUTHOR:
Entrepreneur, Freelance Writer and Blogger. Join me here, on www.clementnkem.blogspot.com and learn how to become a successful entrepreneur.
No comments:
Post a Comment