No one said starting your own business would be easy, and that’s especially true if you’re trying to do it without any help from venture capitalists. But that doesn’t mean it’s impossible – in fact, there are plenty of ways to get the funding you need without giving up a piece of your company.
This is especially important for businesses just starting, as you’ll want to make sure you maintain autonomy over your business for as long as possible. In this blog post, we’ll hear from some top business leaders and discuss some of the options that can help you get started on the path to success. So read on and learn how to make your small business thrive!
Look Into Funding Grants, Loans, and External Opportunities
There are many options for small businesses to seek capital without taking on investors. One of those ways is to look into business and government loans. “Many small business owners are unaware of the tremendous funding opportunities that are available through both state and federal agencies, as well as nonprofit entities.
A distinct advantage of these programs is that many offer funding in a grant or very low-interest form, making them ideal for startups on tight budgets.
Federal loans and grants offered by the Small Business Association or the Small Business Innovation Research Programs and private funding offer such as the FedEx Small Business Grant Program can provide much-needed resources.
By taking time to investigate, small business owners can find fantastic opportunities,” said Zach Letter, CEO of Wonder Works.
The truth is, small business grants aren’t just for 501c organizations; there are funding options available for small, profit-based businesses as well. “Many believe that federal grants and loans are reserved for nonprofit organizations, but they’re are ample funding opportunities available for small businesses.
Especially while we are reeling from the damage of a global pandemic, the government is looking to help small businesses and the economy. So do some research and see what might be available for your company,” said Andrew Ng of Landing AI.
Of course, crowdfunding is a hugely popular way of bringing no-strings capital into a blossoming business.
“Crowdfunding is an excellent way to not only fund your business but to create a community before you’ve even launched. There are ample opportunities to provide incentives for people to invest even small amounts into launching your business. Indiegogo and Kickstarter are well-known platforms, but you can also find ones that serve your specific niche. That’s a really great way to build a committed community from the start,” said Ely Khakshouri, Founder and CEO of Restrospec.
When crowdfunding, you’re up against tons of other campaigns adding to the noise, so make sure your promotion sticks out! “When using crowdsourcing tools, businesses need to get a little bit creative with how they present their funding opportunity. The more personality, humor and wit you can fold into your promotion, the more excitement it will draw from the community and as a result, bring more money into your funding campaign,” said Shaun Price, Head of Customer Acquisition at MitoQ.
Source Family and Friends
Family and friends are often the first to invest in new small businesses. It makes sense, these are the people closest to us who want to support us!
It’s sometimes easy for startup founders to forget about asking friends and family for funding. These are the people who often know you and your goals the best and would happily contribute to making your dream a reality. However, it’s important to make any deal with friends and family as clear-cut as possible so there are no surprises on either side.
“For example, they should understand the risk they’re taking on, and you should make sure they’re in a sound financial position to invest. You should also make sure they understand whether or not they have a say in company decisions. Everything needs to be worked out in writing. You want to make sure not to damage your relationships with loved ones,” said Alyssa Berman-Waugh, VP of Marketing at Level.
Remember to treat these relationships with care, especially after they’ve made a choice to support your business financially.
“Often, some of the first investors in any small business are the friends, family, and supporters of the person running the company. It’s important to respect these relationships because they can easily go south if you don’t treat the relationship with care. Remember that it’s still a choice for them to support you, and one you should show gratitude for!” said Kevin Miller, Founder of Kevinmiller.com
For those that need space and time to work out their ideas and get started, consider looking into business incubator programs.
“Sometimes it can be a smart idea to look into organizations called Business Incubators. These organizations help businesses and entrepreneurs get started from the ground up with office space and allows you to potentially make connections with investors and other business owners,” said Amanda E. Johnson, Chief Marketing Officer of TatBrow.
While not for everyone, these programs often offer cheap or free office space, which can be a lifeline for entrepreneurs just beginning their operations. “Often, these resources are available to new businesses and entrepreneurs at lower costs, and sometimes for free! This might be a viable option for everyone, but for those that need a little push in the right direction at the start of your business,” said Ivan Soto-Wright of MoonPay.
Cultivate Partnerships and Relationships
Cultivating partnerships and relationships with other business owners, brands and entrepreneurs are essential to growing at any stage of your business. Partnerships are often where we get our first significant exposure to the public eye, and it will only help you have relationships with other brands in the industry.
“Whenever possible, cultivate friendly relationships with other brands, businesses, and company owners. This can bring unexpected opportunities your way just by being a member of the industry community. The better reputation your business has for supporting other brands however you can, the more incentive others will feel to support you when you need it,” said Leo Livshetz, Founder & CEO of UnHide.
When you establish partnerships, you can promote each other’s business, making a mutually beneficial relationship that will bring valuable new customers into your business.
“Establish partnerships with other leading brands. This can lead to cross-promotion and allows you to benefit from another company’s customer base in order to grow your own. Many small businesses gain capital in the early stages this way; it’s a great way to establish relationships in your industry as well,” said Jeff Goodwin, Sr. Director of Orgain.
Starting a business is no easy feat. The process of finding funding for your company can feel like an impossible task when you don’t know where to start.
Luckily, there are many options available to new small businesses that may help get your venture off the ground and running smoothly without having to take out loans or ask family members for money.
Family can be a great resource, but it’s understandably not the first place most new entrepreneurs will turn if they can help it. Crowdsourcing sites such as Kickstarter allow entrepreneurs with great ideas but limited capital access opportunities by connecting them directly with potential customers through online campaigns.
And if all else fails, think about applying for a loan from one of these alternative lenders. They specialize in helping startups just like yours break into their industry while still meeting strict underwriting guidelines set forth by banks and other lending institutions around the country. There are tons of options available for entrepreneurs to get off the ground. Try looking into some of these ideas today!
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