Funding your business idea or raising capital could sometimes be difficult. It may get you discouraged or even depressed. We have explained five simple ways you can fund your business idea.
1. Self-funding
Although it may not seem ideal, using your funds to obtain money for a start-up is usually the simplest method. Naturally, there is considerable risk involved in self-funding the business, but the fact that you believe in your company enough to invest in it can increase the likelihood that lenders or investors will also be willing to support it.
However, making use of external funding sources can be beneficial if you want to grow your business quickly.
2. Personal contacts
You might not feel comfortable approaching your friends and family for money, however, reaching out to your network before exploring external contacts is considered a reasonable first step; and many startup entrepreneurs claim to have done this in the past.
On the flip side, combining family and work life may result in unnecessarily increased stress during the capital raising process.
3. Venture into Bigger Capital
You may decide to venture capital if you’re looking for substantial cash. Venture investors can provide you with higher sums of money but are more likely to demand a comprehensive and complete business plan. You will need to make your business plan stand out if you want to succeed.
If you’ve decided to ask for VC funding, it’s time to use your relationships (and their networks) to see who you can talk to. The greatest way to get meetings with VCs is through introductions from other investors or entrepreneurs. Even though dialing a venture investor on the phone may not be the easiest task, it’s a place to start.
4. Share your business idea (#BlowMyHustle)
People frequently advise against sharing your business idea with others because of a prevalent misperception about doing so. When someone expresses interest in your company idea, the dread of plagiarism and the worry that they might be stealing it from you can paralyze you and make you want to clutch it tightly to your chest.
However, keeping your business idea to yourself is damaging its success as well as to yourself, your innovation, creativity, and your brand.
You have a great company idea, a clear vision, and the motivation to see your product succeed in the market, but you will need a lot of funding to make it a reality. One strategy to raise money for your business idea is to share it. But, if you don’t share, how will you raise money?
MTN Pulse Blow My Hustle is an opportunity for all Nigerian youths who have great business ideas to pitch their ideas across all social media platforms for a chance to get funding for their business. Further information on this can be found mtn.ng/pulse.
5. Take a loan
For many business owners starting new ventures, small business loans remain an important stepping stone on the path to success.
The approval of a loan is not assured, though. You will need to fulfill certain criteria, such as having great credit worthiness and operating your business for a set amount of time.