Many people have amazing ideas for small business startups. The problem most times is that they don’t know how to find funding to help them get their business on the road. In this post, I will show you 11 amazing small business startup funding ideas.
See Also: Small Business Startups: What Are Small Business Startups? Tips On Starting One
In the past, if you needed funding for your business, you had to write countless business plans and proposals to submit to different investors. While the need for writing business plans and proposals has not changed, there are however many more ways to get small business funding. In this post, I’d be showing you 11 of the best small business startup funding ideas. Let’s dive in!
See Also: 20 Small Business Startup Ideas For Entrepreneurs
Bootstrapping
Bootstrapping is a business term that means building a company from the ground up with no outside funding or cash support. Most companies that are built with bootstrapping typically start with the founder’s saving, then survive on the first sales made from the business.
See Also: Small Business Startup Checklist
The truth is that nobody will believe in your small business startup idea if you do not believe in it yourself. Therefore, if you believe in your business, you need to be the first source of funding for your small business startup.
In fact, if you are comfortable enough financially to fund the whole business idea by yourself, then you should seriously consider it. But if you can not handle all the funding by yourself, then you should bear as much as of the cost as you can.
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Family and Friends Funding
Another one of the simplest small business startup funding ideas is family and friends funding. You family and friends are your closest circle and your biggest supporters. Therefore, it follows that if you have a small business startup idea, they will be willing to support it.
Before going outside to seek funding, make sure that you have a conversation with your family and friends as they might be willing to support your business idea first.
See Also: Bootstrapping Your Business
Crowdfunding
Another way to fund your small business startup idea is by crowdfunding.
Some startups are limited in the ways they can raise funds. Not everyone has access to wealthy family members and friends, or even angel investors and VCs. So, a number of startups have turned to crowdfunding as a viable means of raising capital for their businesses.
The crowdfunding system of operation is through the use of small amounts of capital from a large number of individuals to finance a new business venture or startup. Crowdfunding makes use of easy access to vast networks of people through social media and crowdfunding websites to bring investors and entrepreneurs together.
Furthermore, apart from raising funds, crowdfunding ventures have also been proven to be a valuable way to gather public opinion and create publicity for a startup or its product. Crowdfunding platforms like kickstarter, Gofundme, Indiegogo, etc. can be of help.
Small Business Grants
Grants are amazing small business startup funding ideas. Free grants are available, especially if your startup is helping to solve a social problem (healthcare, education).
If you’re interested in starting a nonprofit or creating a product that stems out of some sort of academic research, then grants may be the best option for you.
Here at Entrepreneurs.ng, we are always sharing the best grant opportunities with our readers. You can find all the open opportunities here.
See Also: 7 Funding Mistakes That Startups And Entrepreneurs Should Avoid
Venture Capitalists
Venture Capital popularly referred to as VC is a type of funding that investment companies provide to small business startups that have exceptional growth potential and that are believed to have huge growth potential in the long term. Typically, venture capitalists are investment banks, investors and financial institutions who are knowledgeable about investment.
For small business startups who are looking for funding, venture capital firms are an example of great small business startup funding ideas that they can take advantage of. You can research local venture capital firms in your country or your state that are looking to fund businesses like yours and pitch your business idea to them and they might buy into it!
See Also: How To Write A Business Plan That Works For You
Angel Investors
Angel investors are very similar to venture capital but they differ in the sense that angel investors are typically individuals while venture capitals are typically firms. Additionally, angel investors typically invest in early stage startups than venture capitalists. But the truth is that angel investors are as valuable a source for small business startup funding as much as venture capital firms.
To take advantage of this source of funding, you should research local angel investors in your areas and look for a way to send them your pitch. Angel investors are always on the lookout for small business startup companies that they can invest in, so be on the lookout for them.
See Also: Business Plan Sample For Small Business Owners To Follow
Incubators and Accelerators
Incubators and accelerators are programs that look to provide small business startups with training and mentorship to help them start their business journey with more certainty. Typically, incubators and accelerators offer training and mentorship as well as startup seeds in exchange for equity in the business. Incubators and accelerators typically select small business startups that have the potential to invest in and mentor.
The most popular accelerators and incubators include Y Combinator, Techstars, and the Brandery
Microloans
Microloans are small, short-term loans that fintech companies and microfinance banks provide to individuals and small business startups.
If you are a small business startup looking for a small startup loan to help you start your business, then microloans might be the best option for you.
There are many financial companies around the world that are happy to offer short-term loans to business owners who are credit worthy, So, be sure to research and find out local organisations that provide short-term loans to small business startups.
Contests
Startup contests are become increasingly popular. They work like this; invitations are called for startups to contest for a prize money and the contest selects the best ideas to fund.
So, if you have an outstanding small business startup idea, then you should consider entering for some startup contests and see where it will take you.
Here at entrepreneurs.ng, we are constantly sharing some startup contest opportunities with our teeming readers. You can find our contests here.
Bank Loans
The most apparent one of small business startup ideas is by going old-school- applying for a bank loan. Many banks have small business funding programs that allow entrepreneurs to apply for startup funding, and if their ideas are strong enough, the banks will be more than happy to fund your small business startup. However, make sure that you understand the terms of the loan properly and that they are favourable enough to allow your business to grow.
Microfinance Funding Options
Microfinance banks typically have more friendly packages for small business startups. Their funding options typically have lesser interest rates than lesser banks, and they usually have funding packages specifically tailored for small business startups.
If you you are looking for a loan option that will give you a longer repayment term as well as a manageable interest rate, then you should consider microfinance banks.
Conclusion
Business funding could be a herculean task. With new small business startups springing up everyday, it has become even more difficult to procure funding. But with the right information and the proper pitch, you will be in a strong position to secure funding. Feel free to experiment with any of our small business startup funding ideas to see which one will work for you. The ball is now in your court.
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