Fundraising Tips & Advice
Starting a business is both exciting and challenging. To fulfill this life-long dream, you will need funding. If you are independently wealthy, you can use your own funds to get started. But most entrepreneurs need financial assistance, especially to get started. Prepare for your fundraising initiatives by developing a business plan that describes your company's mission and goals. Establish an operating budget. Take stock of funds you already have available and then determine how much is still needed. With that figure in mind, take stock of your fundraising options.
If you don't have enough cash on hand or in an accessible savings account, consider your other financial assets. Could you borrow from your investment account or IRA to start your business? Perhaps you could tighten your household budget to save enough each month to help launch your new enterprise. You might be eligible for a home equity line of credit on the property you own, which would provide another funding source. If your schedule permits, you could get a second job or part-time position to get your company up and running.
Friends and Family
Another possibility is to ask a close friend or relative to float you a loan temporarily. Although mixing money with personal relationships is not always a good idea, those with whom you have a strong relationship may be willing to lend you enough to start the company. Treat those funds as you would a professional loan by setting up a repayment plan and sticking to it. You might even offer a small amount of interest on the loan if that helps to make the deal mutually beneficial.
Several kinds of grants are available for startup fundraising as well. Depending on the type of business you are launching, you may be able to find municipal grants for land improvement or building repairs. There are grants for small businesses that need equipment or furniture to operate. Some grants may also be found for general operating expenses on a temporary basis; however, most grants do not offer funds for this purpose. If your company will offer benefits to the community or give back in some way, there are grants that may share the expenses of certain programs or events.
Banks, credit unions, and other lending institutions offer a wide range of loans for business startups and related costs. For a relatively small loan of a couple thousand dollars, you may be eligible for a signature loan for which no collateral is required. You may also be able to apply for a small business loan based on your company's development to date and prospective earnings. Your detailed business plan can include profit forecasts and help to convince lenders of your knowledge, skills, and commitment. When applying for a business loan, your personal credit history may be reviewed, so be sure all your bills are paid on time and that your credit score is in good standing.
GoFundMe is one of the best-known crowdsourcing programs online, but there are plenty more. Browse several for an idea of where your business might be welcome and reach a wide audience of potential contributors. You will need to prepare some marketing materials to cast your business in a strongly positive light to convince people to donate. Short videos, audio recordings, and photos of your products can be included in your pitch. You might even offer small gifts in return for certain levels of monetary donations. For example, if you wrote a brief e-book about a topic on which you are an expert, you could give free copies to people who donate $100 or more.
In lieu of cash donations, you may be able to negotiate with local businesses to exchange services that will reduce your startup costs. For example, Maybe you could provide maintenance sweeping and trash disposal at office spaces in return for free rent. You might offer to write a weekly blog in exchange for marketing services. Be creative in looking for discounts and ways to barter services and goods.
With numerous startup fundraising options available, you should be able to find some that will help to get your business going. Now get started.
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