How to get investment for your business

Capital investment is an essential requirement any time you launch a new business. It can be any kind of business, a start-up, or an MSME, or even a large organization. Even though a lot of capital is not always necessary for a business to start functioning, having funding is very important for a business and it is what makes a strong foundation that then helps the business expand and grow to the desired levels and beyond. Getting funds for your business can be a very tough task that has many challenges along with alos being a task that consumes a lot of energy. Having knowledge about techniques related to financing is very important when you are starting a company or spearheading a new business. A few important factors and techniques that everyone should keep in mind are as follows:

A. Personally investing in your business or startup

One of the best ways to finance your business is to personally invest into it. Bootstrapping and setting aside your own money can be a very great way of collecting a generous amount to kick start your journey as an independent business owner. Personally investing will also help you secure a loan in the future as even banks have certain specific questions on their loan applications which ask about the amount of capital you have invested in your idea or business.

For entrepreneurs who are investing for the first-time, the best option is to invest into their businesses personally as they can also show this as a sign of stability for them as a company and that it will be seen as a low-risk factor for a lender as they see you’ve already personally put money into the company. Bootstrapping and investing on your own also ensures that you don’t have the headache of monthly payments early in the business as you’re just starting out and trying to turn a profit.

B. Ask your friends and families to invest

Even though some people might look at family and friends for investing in their businesses, it is not that bad an idea. Asking the people whom you are close to and those who believe in you, can be an excellent source for investment funding. Before you start making rounds and start asking for money, you should be prepared with a stellar plan for your business and make sure that you let them know that their money will be returned with whatever added benefits that you promise they will get if they invest in your idea.

Make sure that your business plan is solid, because this is your family and your friends who are investing in both you and your idea, which means they’re trusting you with a lot of money. Explain to them what your business is about, whether you are asking for an investment or for a loan, and how they expect to be paid and their general expectations too.

C. Look for alternative sources of funding

There are a plethora of ways an individual can raise money these days. If you are looking for small amounts, or amounts for a shorter period of borrowing, there are numerous established websites that now offer small, or micro loans to individuals for their startup businesses. Some websites that you might go to are Accion, and Kiva, who are both legally established and trustworthy with great terms and conditions for their borrowers.

D. Try Crowdfunding

A very popular alternative funding source these days is crowdfunding. Crowdfunding sites have gained a lot of traction in recent years as they help people get their businesses up and running. Established crowdfunding sites include GoFundMe, IndieGoGo and Kickstarter, where you can create a campaign for your startup or business and then list the amount of money you wish to raise. It is vital to provide detailed information that is easy to understand because you don’t personally be able to explain your business plan or give an executive summary to every person who electronically gives money to your campaign. You can also sanction special perks or gifts for individuals who donate more than the specified amount which ensures that they might tell other people about it.

E. Consider securing a loan

Go old-school and secure a loan for your business or startup! If you and your prior businesses and your partners have a good credit history then go ahead and apply for that bank loan now. It also helps if you have existing assets that you do not mind putting down as collateral for the loan that you’ll be securing. A working business plan, with all the financial aspects plotted out clearly is crucial in you getting that loan. Make sure that you consult with a team of experts on finance before you present your loan proposal before your preferred bank. The major advantages that this option gives is that you have full autonomy and you retain full equity, as long as you keep paying the money you owe the bank in the manner intended.

F. National and State Government Grants

There are numerous state and national grants offered by the government of each country. The main reason these grants are offered are to help budding entrepreneurs and startups who want to stimulate the economy and make a real difference! It is worth it to pursue a grant offered by the government for funding your business and make sure to apply before the stated deadlines. Grants are also given by private institutions for several different types of startup businesses, be sure to do your research and see which one is the most beneficial for you and your business.

G. Try to seek a venture capitalist or an Angel investor

It can be mutually beneficial if you can find someone as passionate about your startup as you are. A venture capitalist is someone who invests money in a business after making sure that they are going to get a good return on their investment. An Angel investor also functions similarly, as they are individuals with a surplus amount of money who wish to invest in businesses who have a high return rate on investments. It is important to show them the projected profit numbers that your business will achieve along with the path that shows growth and evolution in the business. Venture capitalists and angel investor investments carry more risk as they are looking for and expect more money in return than they had originally invested in the business. Make sure that your projected trajectories are on track by creating a detailed plan.

In conclusion, there may be a different idea or plan that may work better for a different business. What we can establish is that there are many different ways to secure funding for your business and that an excellent business plan is extremely important to support your business idea in order to secure the funding.