After you’ve conceived the business idea, the big task is often how to fund the business. Having a great idea doesn’t mean you will be successful at starting the business and sustaining. One major factor that determines the success of a business is funding. Luckily, there are many funding options that can help your business get started. This article focuses on tips for entrepreneurs to fund their businesses from Paul Saunders.
This is a form of funding which involves using money from your savings, borrowing, or credit cards. This is among the best paths entrepreneurs take. However, it is unlikely for you to raise the full amount required to start a business using bootstrapping. It is a good place to start because it demonstrates that you’re serious about the business to other investors. It is also a good source of capital because you will not have to give out equity or control in exchange. As Paul Saunders, the Founder and CEO of James River Capital Corp., says, some people fail to raise money this way because some investments requires huge capital.
Crowdfunding involves people coming together to support someone’s idea without expecting anything in return. They give their support through campaigns. The campaigns often offer some incentives such as T-shirts. For this method to work, you must do a lot of marketing to get your idea out there. Mostly, entrepreneurs use social media platforms to market their ideas and mobilize funds through selling of T-shirts and other incentives.
- Business loans
Entrepreneurs go for bank loans or small business administration loans to start businesses. Mr. Sanders would tell you bank loans come with lower interest rates as compared to SBA loans. You need a great credit score to get a loan from either a bank or SBA. You could also go for a business line of credit which gives you more funds for your business.
- Local loans
Local loans is also another viable option recommended by Paul Sanders. You can get more information about local loans in the Chamber of Commerce. You will get to meet entrepreneurs who will introduce you to their investors and guide you through how to apply for local loans.
- Angel investors
These are investors who are always looking for great business ideas to invest in. Apart from providing direct loans, angel investors can also connect you to other potential investors.
- Venture capitalists
Venture capitalists invest money from their clients in businesses that promise high returns in a relatively short period of time. Paul Saunders advice entrepreneurs who are considering to take this route to prepare well because the investors are looking for concrete proof your business can make the high returns.
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