Starting a business is never an easy thing, but for many, it is the ultimate dream. The biggest nightmare that most potential entrepreneurs face is coming up with funding. What happens when traditional funding sources come up dry? The truly ambitious person finds a way to make things work. If you are finding yourself in this position, here are four other ways to fund your startup.
Use An Online Lending Service
If you do not have the credit to obtain traditional funding, you may be able to find an online lender that can help you. Websites like loanmonkey.net can get you in touch with one of these lenders and it is free to get an offer.
Here is how it works.
You enter in how much you need and then a little personal information about yourself. You then submit your quote request and ideally, you get approved. If approved, a lender will make you a loan offer and you can accept it or turn it down.
The good thing about using an online lending website is that many of the lenders specialize in working with less than perfect credit. If you are having trouble with traditional banks, you will likely find an answer online. They also fund their loans fast, sometimes the very next day.
The bad however is that the loan fees and interest will generally be higher. The higher the risk to the lender, the higher you pay, it is as simple as that. Loan amounts are also lower than what you might find at a credit union. You might find that you come up short on the amount of capital you need with an online loan.
Turn To Crowd Funding
Crowd funding is one of the newest ways to start a business and it is a very appealing concept. You apply to an account like kickstarter.com and, if accepted, you can get the funding you need from hundreds or even thousands of individuals.
Of course, Kickstarter is mainly for creative projects, but there are many more crowd funding websites geared to every industry.
The good thing about this type of funding is that it can be a very fast and often low-cost way to get the money you need to get your business running. The crowd funding website usually takes their cut, but you will likely come out better than you would with a bank loan.
The bad part is that not all projects will get approved and, of those that do, funding goals might not be reached. With many of these websites, you either reach your goal or not. If you come up short, the money will be returned to the individual investors. With crowd funding, you will have to do your part and network to get people excited in your project so that they will invest in you.
Open A Zero Cost Startup
Do zero cost startup businesses really exist? Well, yes and no.
There are startups that can cost you practically nothing in the beginning. Businesses like carpet cleaning, maid services and even web design. These are businesses that you likely already have the tools necessary to start. You probably have a lawn mower in the garage or a laptop that you can use to design websites. All that you need to do is put the supplies that you already have to work.
The good thing about going this route is that you can start your business with zero debt. Debt can be an anchor around even the best of businesses and without it, you can reinvest your profits into your company instead of paying interest. Initial operating costs will also be low which means that you can turn a profit faster.
The bad part about opening a zero-cost startup is the lack of funding itself. You may already have the tools of the trade, but you do not have money to advertise. That means that you will have to network and network aggressively. It also means that you will probably not be able to work your new business full time, at least not in the beginning. You will have to build up your clientele before you quit your regular full-time job.
Have A Little Patience
Unless you just have a killer idea and need to seize a unique opportunity, you can probably wait to open your business.
Yes, working your 9 to 5 is probably a drag, but having a little patience now can earn you huge dividends in the future. Instead of rushing into a business, sit back and save the money that you need instead.
The good with waiting is that it gives you time to think things over. You can develop a rock-solid business plan so that when the time is right, you can strike hard. In addition, by saving money instead of borrowing it, you will be debt free from the beginning.
The bad here is that being patient is no fun. You want to open up your business and you want to open it now. There might also be a unique opening that you could miss out on by waiting. Perhaps you see a hole in the market that could be filled by your company. Waiting might mean that you miss out on a once in a lifetime opportunity.