Raising Funds In The Early Stage Of Your Business

Funding an early stage business can be a challenge, particularly with the current economic climate, as today the majority of people are unable to get a business loan from their bank unless it is secured on their property.  Whilst many entrepreneurs have such self-beliefs and optimism that things will work out well and would be happy to offer their house as collateral, saner minds prevail often due to the involvement of a concerned spouse.  In this way, you’re not just gambling your own security, but that of your family’s too.   Essentially, raising capital to start a business isn’t usually an easy or comfortable task but at the same time i,t doesn’t have to be as painful as some people make it out to be.  Unfortunately, entrepreneurs face immense pressure from all aspects of their business and whilst they know the odds are usually stacked against them, they keep on keeping on, as they know the payoff can be worth it.   If you’re reading this article there’s a strong chance you have an idea that you know could transform your financial situation but are in the frustrating position of needing money to make money.  Perhaps you’re sitting on the next Spotify or Uber, or maybe you’re wanting to take your life to the next level by setting up a local business to support you, your family, and the local community.   The one thing that makes entrepreneurs different to most people is their vision, focus and determination.  These are all very admirable qualities that fuel success… but without cash in the bank to fuel your vision, it can be very difficult to launch things off the ground.  Having cash behind you is imperative, particularly if you are at the stage where you are preparing for your first trade show and need to invest in paraphernalia such as Custom Earth Promos reusable bags to get your brand out into the world.   This article, therefore, considers three of the most simple ways you can fund your early-stage business:
Get a Business Loan
The most traditional route for setting up a small business is to get a business loan, yet as mentioned above, nowadays this seems to require security.  That said, this would mean you remain in complete control of your company and aren’t having to offer equity to external investors who get a say in how your company is run.

Similar to how professional investors put money into startups in TV shows like Shark Tank and Dragon’s Den, your friends and family could become shareholders in your business, through an external investor, particularly if they are a business angel might bring a lot more value than friends and family as they often bring expertise, insight, and contacts in addition to a cash injection.

Friends and Family
If you have friends and family who are open to backing your business this can be a great option as it will usually cost less and be easier to arrange than a bank loan or equity investment form an external investor.  However, borrowing money from friends or family can come at a high social cost if things don’t go to plan.   Image Credit

One thought on “Raising Funds In The Early Stage Of Your Business

Comments are closed.