How to finance a business
Feb 15 2018
You had an interesting idea, decided to start a business and are now in the process of figuring out the numbers? Great! However, beginning a journey as an entrepreneur works best if you’re in a good spot financially. And the reality being what it is, a lot of people start in business with modest means and that's fine as well; financial freedom and having your company is not only for the richest!
Nevertheless, the cost of starting a business is often full of surprises and you will certainly need cash to acquire the necessary commodities for the smooth running of your project.
Looking for financing? Don’t worry. Here is a list of 5 avenues to explore to realize your ideas.
1. Traditional banks
This is the most obvious option of the lot. A line of credit, a personal loan or a business credit card will help you get the resources you need to run your business, especially if you have a lot of early expenses to do for your product before you can start selling. However, these options are on approval of your credit rating and often come with expensive interest rates so it's important to qualify the profitability of the idea before investing funds borrowed at a 20% interest rate.
Several provincial initiatives are at our service: depending on the field and the chance of success of your project, you may be eligible for government grants. Local development centers or simply an experienced accountant will be able to put you on the right track if your idea fits in with any of the help programs in place.
3. Private loan
Private loans offer great advantages: they are often quick to obtain and some can be granted without any credit approval request, they can get out of a tough spot or provide cash quickly to prevent a default of payment or the maintenance of your business operations while the sales are not there yet.
Do you have a creative, unique or out of the ordinary idea? Platforms like GoFundMe or Kickstarter offer exceptional showcases for projects that stand out. Operating in the form of donations, with reward tiers depending on the amount donated, several successful companies have started on these facilitating sites. All you need is an idea the world wants to see!
5. Find an alternative product
Often, it is not the idea that is lacking but the means to achieve it. They say it takes money to make money! Without giving up on your project, starting in a more modest way can be a way to achieve your goal: selling less expensive ancillary items or selling maintenance on you competitors products before selling your own new version will allow you to get to work in the field in addition to reducing your expenses and getting a quick return on your money so you can start your real business with less risk.
All-in-all, if you are just a tad bit resourceful and/or a go-getter (otherwise, these are qualities that you will have to develop as an entrepreneur!), you will find the right financial solutions for your adventure which is bound to be a great ride.
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