Financing Your Small Business

in Business Ideas,Ideas for New Businesses

So you fit the profile: you’re tired of working for someone else; you’re tired of your great ideas and hard work benefiting someone else’s bottom line; no matter how well you might be compensated for your work, you feel you deserve more and you want to be your own boss and make a mark on the world. In other words, you want to start up your own small business, whether it’s something traditional and well established like a store or service or something revolutionary in the App world. Whatever your core concept is, there are always going to be aspects of small business that never change. One of those aspects is financing: Before you can earn a penny from your ideas, you have to find the cash to build everything in the first place.

The Old School ways of Getting Funding

There are a few ways people always think of to finance their business ideas. The two most common ways people pursue funding are loans and venture capital. You can take a proposal to a bank, which may agree to finance your start-up in exchange for the interest they will earn on your loan. Or you can shop venture capital and angel capital to find someone who can share your vision and get you started in exchange for some piece of the business or other arrangement.

These are well-established routes to financing a business for the simple reason that they work. For centuries people have been getting the start-up funding they need for their businesses in this way, and there is no reason not to pursue these avenues if they seem likely to work for you. However, this is the 21st century, and there are more creative ways to gain funding than ever before.

The New School ways of Getting Funding

There are three main avenues towards start-up funding that many people may choose to overlook or simply do not know enough about:

Kickstarting your Business

Whether literally through the Kickstarter website or a similar place, or simply by stealing the concept, you live in a time when incredible amounts of money can be raised from crowdsourcing. This could mean going to the web to find your future customers and pitching them en masse for funding in exchange for a variety of premiums, including insider pricing on your first roll out of products, input into branding and design aspects of the product, or simple acknowledgement of their contribution. With everything from gaming consoles to feature films being financed by Kickstarter and the like, it is a viable option for funding these days, and allows you to set the terms of investor involvement right up front.

Grants

Government grants have always existed, but in the Internet age it is much easier to find them and apply for them. A stunning amount of money is available at all levels, and the Internet allows you to find all of the possible programs you qualify for. On top of this there are often online application processes that remove some of the confusing effort involved in working through multiple grants from multiple agencies. As a new start up, the best news about grants is that they are typically not required to be paid back, and there is no on-going ownership on the part of the agencies involved.

Overseas Markets

The world has got so much smaller in terms of markets and travel and for that reason many countries wish to invest in foreign companies as the world economy remains chaotic. Finding overseas money is now easier than ever, if you are based in the UK, you could quite easily find investors from other European countries, USA, Australia etc. While of course there may be language barriers for many countries the digital age still allows us to make connecting with foreign investors easier than ever before.

Whatever your initial plan is for funding, it’s always a good idea to have more than one round of fundraising, and more than one funding strategy in case you need to look for unexpected funds if startup takes longer than expected. Don’t put all of your eggs in one basket, more funding applications and ideas will allow you to reach that start up amount that you require sooner rather than later. There’s even more good news in that as there are so many options these days, switching from one to another is also easier than ever!

Will Craig started off as a sole trader and now owns and directs Glasgoweb, a digital marketing agency based in Scotland. Will started Glasgoweb through a combination of Government grants and loans but takes on many new startup clients that have taken advantage of Kickstarter and similar sites. Will has an all round knowledge in business and digital marketing with expertise in web design, graphic design, SEO and PPC.

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