This is a question that never gets old. How do I raise money for my business? I have an amazing business idea, but I have very little or no savings and don’t know who would lend me the start-up capital!
Just like you, many people are asking this exact same question. In this article, I will be sharing a few practical steps you can take. You may have already heard some of it before but this time take it seriously. As there are no other magic formulae out there.
Note! Most of these tips will not produce results overnight. It may take time but you need to be patient.
Tip 1: Personal Savings
You may not have much savings, but you can start saving today. Cut out all unnecessary expenses like new clothes, and entertainment, reduce your phone data usage etc. It would surprise you have much you have at the end of the month when you take cost-saving seriously.
Tip 2: Get a side hustle or a better paying Job
You might have to get a side hustle outside your regular job or if you don’t have a job, you might have to find one first. If you are currently employed but are underpaid, find a better paying Job to help speed up the process of raising capital for your business. As you earn more, ensure that all additional funds are stored away for the business.
If you are going to get a side hustle, it would be preferable if it is a service-based product. This will reduce the risk of losing money on a bad product that you can’t sell.
Tip 3: Loan from family and friends
Your family and friends are most likely the only ones who would believe in your dream and be interested in supporting it. Remember, just because they are your family does not mean that you should not have a business plan ready to show them.
To increase your chances of getting funds from them, think through your idea properly and create a plan and document it. This would help them see that you are serious and reassure them that their investment won’t go to waste.
WhatsApp is a powerful tool. Share your idea and your need for funding on your WhatsApp status and you would be surprised by the feedback. the chances are high that you might get someone who would be willing to invest.
Tip 4: Government and private Grant and loans
Most Government and private organizations do not give grants to new start-ups that are still in the idea phase. Most of them require you to be in business for at least 2 years. If your dream business requires a lot of capital and you would like to get a grant or low-interest government loan, you can begin the process by starting small. Begin the documentation process that would open the door to several grants and loan opportunities in the future.
These organizations what to see that you are serious about the business idea and that the idea is feasible. These are the actions that you should take to prove it to them.
- Register your company
- Open a corporate bank account (preferably with the bank you want to seek funding from)
- Ensure that all business transactions go through the bank account (big and small)
- Start engaging in activities around the business idea (for example, if you want to start a restaurant, you can start with catering for events from your home, you want to start a boutique, start selling small fashion items online).
- Join small business organizations and cooperatives. These places would provide you with great networking opportunities.
- Keep track of your accounting records.
Check out our article on the best accounting app for Smes
Download our printable accounting journal for small businesses.
