Most entrepreneurs who have their businesses up and running today can attest to the fact that one of the main challenges while starting a business is getting funds. Well, as much as you have a brilliant business idea in mind, it goes beyond that. For any viable business idea to get the necessary funding, it is essential for the owner to write everything down on paper and come up with an excellent business plan.
A business plan is your first marketing tool as a business. Investors will only be attracted to your business depending on how well the business plan has been structured. Remember, the investors are also risking their money not 100% sure of the business’s success, and that is why as you pitch your idea to them you need to be fully geared up. Also, ensure that you have small business budget templates in place to ensure that the funds you get are correctly allocated.
What then are some of the ways to fund your small business?
- Friends And Family
This is one of the most sought out ways that startup companies use. No man is an island, meaning that you probably have a friend or two as well as family members who are more willing to support your business. While requesting the funds, it is vital to ensure that they have a good understanding of what the company is all about and what they are in for. You could either ask them to be your partners or assure them of the period you will take to pay them up. As much as some of them might give you the cash without any expectations of any interest on top of the initial amount, some may demand of a small percentage of interest after the agreed payment period. It all depends on how well you relate.
- Angel Investors
Angel investors are those people who look out to support promising startup businesses. Getting fund from angel investors requires you to do your due diligence when pitching your idea to them. Get your facts right, understand your business plan word to word and most importantly your budgets. They often want to dig deeper to see if you are serious about your business, so do not freak out when they come hard at you with so many questions.
- Retained Profits
If you have been in business for a short period and are seeking to get more funds to grow your business, retained profits may come in handy. Retained profits are the cash generated by your business as it trades profitably. For example, if your products are worth $20,000, you could sell them at $30,000 meaning that your profit is $10,000 which you could use to fund your firm.
Today, there are very many companies that are willing to offer loans. However, you have to be very keen on their terms and conditions before opting for any of them. Ensure that you clearly understand their requirements before taking the bold move. Also, make sure you have all the business and personal documents in place as they need to see if you are well trusted for them to give you the money.