Starting a new business has always been a difficult thing for budding entrepreneurs to try. The vast majority of new businesses end up failing during their first several years of operation. However, the odds of a new business succeeding have become even worse as a result of added competition from the Internet. The reason that many of these new businesses fail is not because they are bad ideas, or are ill-conceived. Many of them fail because they simply run out of money before they have a chance to adequately promote the business, take a foothold in the market, and develop a loyal customer base. Let’s take a look at a few ways an owner of a new business can find funding for his or her new venture to keep it afloat for years to come.
Borrow From Trusted Sources
This is one of the best ways to get funds and help your business survive. Give it the time it needs to create some buzz and gain a loyal customer base. There are many advantages to borrowing money by this method instead of a bank. First of all, since your friends and family know and trust you, there is a good chance they will not force you to pay interest on the loan. This could save you an extraordinary amount of money. If the person you are borrowing money from does ask you to pay interest, it will most likely be much lower than the interest rate charged by a bank. Banks will also have firm deadlines on when your loan payments must be made. However, if you are paying back someone you know, they will most likely be flexible with the payment time frame. Finally, banks will require collateral for a loan and people with bad credit will most likely have their loan application denied. If you are borrowing from friends of family, your credit will not be an issue, and they will probably not demand any collateral.
This method has become an increasingly popular way for new businesses to get funds for a startup. It involves a group of people who agree to pool their money together to support businesses run by other people. This method of financing is usually done online. The unique concept behind crowdfunding is the fact that it gathers many smaller investors together instead of looking for one or two large funding sources. It may be the perfect option if you don’t have the means to be approved by a bank.
This method of gathering funding is similar to crowdfunding in the way that is allows the owner of a business to make their case to potential investors and hopefully convince them to put their money into their business. The key difference between the two methods is that P2P usually deals with a single person lending money to another person. It does not involve groups of people pooling their resources.
You simply convince the one person that your business will succeed and you both agree on what they might be able to lend.
These ideas are just scratching the surface of ways for people to finance their businesses. When your business is just getting started, it is always a good idea to do things to create interest from the public. Printing gift, loyalty, or membership cards will give people an incentive to buy from you in the future and provide a quick gateway to your business. The plastic card city cards will also remind customers of you every time they open their wallet or purse. Use your imagination and get started thinking of new and innovative ways to startup your business.
“Brooke Chaplan is a freelance writer and blogger. She lives and works out of Los Lunas, New Mexico. When she’s not writing articles she spends her time outside running. In her research of this article she found this company to have some good ideas for raising quick money for advertising. Contact her via Twitter.”