Asking for money for any reason is never easy, especially as a new business owner. According to CB Insights, 29 percent of startups fail because they flat-out run out of cash. The best way to fund your business and avoid being a part of this statistic is by creating a business plan.
The key to a successful one is to make it as detailed as possible. You must know what your startup’s goal is, how you are going to market your business, who you are going to market to, and so on. Once you have a detailed business plan, you can then come up with how much it will cost you to launch and run a successful company. Now it’s time to start knocking on some doors.
Apply for a small business loan
Take that detailed business plan to a bank and ask for a small business loan. Don’t ignore the idea because you don’t have an extensive credit history. If you keep hearing, “no,” contact a third party that specializes in helping startups get easy access to lenders. Hiring an expert, though another business expense, can get your foot in the door for the loan you need to start expanding.
Take note: angel investors hate “get rich quick” schemes. Show them that you are a legitimate business with your plan, stats, valuations and real projections. Even if you hear a “no” the first time around, always keep in touch, says Inc.:
“An angel may not be interested in your business right away, especially if you don’t have a track record as a successful entrepreneur. To combat that, you should formulate a way to keep them in the loop on big developments, like a major sale.”
If you keep hearing “no,” it could be that your business plan isn’t up to an investor’s standards. Go back and tweak a few things, then try again.
Some of the most successful startup companies came to be because of a successful crowdfunding campaign. Before it sold to Fitbit for $23 million in 2017, Pebble smartwatch got its funding from a Kickstarter campaign.
According to Business Insider, “The original Pebble smartwatch was the company’s first product, which offered an e-ink-based screen that gets long battery life, and raised $10,266,845 in 2012 before shipping out in 2013.”
If you’re thinking of running a Kickstarter campaign, be open and honest with your audience, and show (don’t tell!) how your product will benefit them.
Ask family and friends
Those closest to you want to see you succeed. Don’t count them out as a means to help fund your business. If friends or family choose to invest, take their loan and put it toward building a website or use it to launch your startup’s operations.
Another thought is to use their donation or loan to develop additional pitch materials for larger investors. Even a small donation from friends and family can go a long way.
When starting a business, and especially when it comes to financial matters, you need to document everything said in each meeting. Rather than designating someone to scribble down notes as fast as they can, record your meetings.
“This type of document is more effective than minutes, since it will describe everything that was discussed, rather than simply summarizing,” according to Entrepreneur.
You can then take the audio recordings to a transcription services company to have them provide a text-based document of the meeting.
There are many opportunities available to you to get your business off the ground when it comes to funding. If you believe in your service or product, others will, too, and the rest will follow.