10 Important Tips to Raise Money for Your Business
10 Important Tips to Raise Money for Your Business
Raising capital for business is one of the major challenges of every entrepreneur, which is sadly inevitable. If you are going to become a CEO, you need capital. Many have unique entrepreneurial ideas, but do not know how to exhibit them because they lack capital. If you randomly ask 100 entrepreneurs why they are yet to initiate that business plan they have always fantasized about, ninety-five percent of them will complain of capital. Study shows that only about ten percent of businesses make it to twenty five years and more. So, while thinking about starting a business, you must also think about sustaining it. Getting capital for that business might not be as hard as you think, but it may be challenging if you don’t know how to go about it. In this article, I have provided ten different tips that would be helpful for every entrepreneur on how to raise money for their business. I implore you to patiently take your time and read to see which one suits you best.
1. Personal funding: this is the most crucial part. To start any business, you need to donate a part of your savings to it, this is the only way you can look serious to investors who would later be interested in investing in your business. Invest money from your current business into that business idea cooking up in your head. No one understands your dream better than yourself.
10 Important Tips to Raise Money for Your Business
2. Earn from a job: most entrepreneurs engage in one job or the other before they execute their business plan. It is important as a prospective CEO to have a job which fetches you money and experience. Working for someone would help you learn more of job ethics which will set you forward when you eventually own your own business. When you have a job, you earn in salaries or wages that you could save up and add to your personal savings, then invest into your business. This is just a step to the future.
3. Friends and Family: we all have people who love us dearly; they are especially our family and friends. Setting your ideas before them and asking them for fund is one thing that could help you grow your business. Friends and families are emotionally connected to us and they feel our intentions such that it wouldn’t be a hard thing to convince them to invest in our idea. I bet they will be so willing to help.
4. Get a partner who has money: you might want to consider partnering with someone who’s got the money. Here is the gist; you have the idea, and he has the money, you two come to pull your resources together, yours in intellect and his in cash, to achieve one common goal. In the end, no body loses, you both gain.
5. Sell your assets: this might seem like an insane thing to do right?, but if you took a closer look, you would see that it might just be the best thing to do when you are so stuck and there is no help coming from nowhere. If your business idea is so important to you, you might want to consider that car you own, or that gold jewelry given to you by your late dad. Selling your assets to achieve your goals does not mean you are not wise, it only shows you seeing an opportunity and doing the needful in order not to lose the opportunity. If you realize that business goal, I bet you would be able to buy a more expensive jewelry and even better cars. Remember, business is all about risk.
Read Also: 10 Ways to Turn your Salary to a Profitable Venture
6. Receive Advance funding: if you handle the production of your business, you might want to consider receiving advance payment from customers. How do you do this? You make your goods available on pre-order, so customers would have to place orders and pay before receiving goods; this is a chance for you as you could invest the money realized into your idea.
7. Get a bank loan: getting a bank loan might just be another thing to do. There are loans available in banks for business owners; in fact, banks generate more profit from loans than any other transactions. However, the issue with banks is that they do not really give out loans to small business owners because they are scared the business might fail. Like I earlier said, only about ten percent of businesses survive till twenty five years and more, so banks prefer to give loans to already established businesses than upcoming businesses. Do not panic, there is always a way out for everyone.
8. Access small loans and grants: if your business is a small scale business, this tip is for you. There are loans and grants available for small business owners. So if you have being to banks and they refused you of loans, you could get loans from microfinance banks, they are meant to loan out to small businesses. Government also offers loans and grants to small businesses because they contribute so much to the economy of the country. I must sure spell out the difference between loans and grants here. While loans are given out with an expected percentage on return, grants are given out freely. You do not pay back grants, you pay back loans.
10 Important Tips to Raise Money for Your Business
9. Enter for business competitions: there are competitions all over the internet for entrepreneurs with great ideas, you could enter into any of these competitions, who knows, you might win. And even if you don’t win, you might attract investors who would be willing to pour their money into your idea.
10. Angel investors: there are people who already have the money required to set the pace of your business. You could go to go them and let them know of your ideas. They might be willing to invest and become a stakeholder. These people are called angel investors. You do not know they might be just next-door or next street.
Meanwhile, I won’t forget to talk to you about the importance of networking as you try explore the tips I have provided above. Raising funds for your business isn’t something that can be totally achieved in isolation, you need to network. You never can tell; your investors might just be on your contact list. So, I am giving you this as an extra tip that you must learn to network, interact with people, build relationships with people you know could add an added advantage to your life. If you read all the tips above, you would have realized that all the tips I gave in this article would directly or indirectly require networking. Therefore, extend your network. Network to the right people.
In conclusion, most, if not all, of the aforementioned tips for raising business funds will require you having a bankable business plan. Without a plan, you’re simply telling investors or financial institutions (in case of a loan) that you are not serious and you are not organized enough. This is almost always a disqualifier, no matter how brilliant your idea is. Having a business plan is the most important step in your bid to raise business fund, whether in a short term or in a long term. If you’re not sure how to get started with a fund attracting plan for your business, reach out to us for help. A simple sample can give you a great head start.
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(B.Agric, MBA)
08105636015, 08076359735
Serial Entrepreneur - International Business Planning Consultant - Speaker - Trainer - Author - Blogger - Network Marketing professional.
- 2018 SME Business Trainer and Coaching Advisor at GIZ for SME Loop.
- 2018 YALI RLC Online Cohort 9
- 2017 Fellow, Inspire Africa Train-the-Trainer Entrepreneurship programme sponsored by US Consulate Lagos and the Dickey Center, U.S.A.
- 2016 Fellow, Tony Elumelu Foundation Entrepreneurship Programme
- 2015 Top 50 Innovative Entrepreneurs, BET5 by Diamond Bank and EDC, PAU.
He is an alumnus of Enterprise Development Centre (EDC) of the Lagos Business School (LBS), Pan-Atlantic University (PAU). Through his training, mentoring, speaking and coaching programmes, he has empowered many young people over the years to start and grow their own business, build wealth, create multiple streams of income and achieve financial independence.
- He is a Certified Trainer in Design Thinking by the U.S Consulate, Lagos and the inspire Africa Entrepreneurship Institute.
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