The decision to start a business is a huge one. Entrepreneurs and small businesses make up a vast majority of startups in the U. S. There’s no denying the first five years are the hardest.
Studies show 82 percent of businesses that close their doors did so because of a lack of capital funding.
Seeking startup funding is the top priority. You want to ensure you have enough capital to open the business and keep it operational for at least two years.
Are you ready to jump into the entrepreneurship pond? Keep reading for five factors to consider when setting startup funding goals.
1. Seeking Startup Funding From a Bank Loan
Entrepreneurship is a journey. There are steps to take along the way. If you don’t have startup funding on hand, take a look at your financial situation.
Applying for loans is an option if you have decent credit and can show your ability to repay the loan. Before quitting your day job, ask yourself if you’ll need to borrow money. Having a steady income will place you in the right position for approval.
2. Fund the Venture With Personal Funds
It’s always a good thing to save for a rainy day. Equally important is saving for your dream of business ownership. Personal funds a great resource when you have access.
You can tap into your 401K, personal savings, or borrow against the equity in your home. Another resource is unpaid settlements.
Here is how you can get money from a structured settlement to reach your startup funding goals.
3. Tap Into Personal Connections
Sometimes the people we know are the best options for funding. Unlike a bank, your family and friends know you the best. Some are excited about your plans for a startup business and want to invest.
Treat loans and investments the same as a commercial bank loan. Submit a contract showing how much money you’ll need. Offer realistic repayment terms and adhere to them.
4. Look Into Startup Investors
People with money sometimes use it to make more money. Private investors look for opportunities to invest in startup businesses. They recognize everyone with a dream of owning a business can’t fund those dreams.
Create a business plan and demonstrate how and why the business concept will have great profitability. These are typically short-term loans, so make sure you’re realistic about your goals.
5. Seek Alternative Funding
Crowdfunding is an alternative funding option. Find a platform that suits your needs and makes it easy to reach your targeted audience. Set your startup funding goals and promote your page.
If people are interested in your startup idea, they’ll make donations to help you reach your goal.
Choose the Option Best for You
Seeking startup funding doesn’t have to become stressful. Show some creativity. Create a marketing package to attract the right people.
Once you have your sources of funding setup, it’s time to focus on your launch.
Looking for more great tips for startups? We have more great content in our business section.