Top 7 Ways To Raise Capital For Your Business
Need ideas on raising capital for your business idea? Welcome.
One of the most difficult tasks for new and intending entrepreneurs is accessing funds for starting up their small business. In this case, raising capital is never an easy task and often requires a lot of determination and patience.
There are a number of ways you can easily raise capital for your business, however, before you employ any method for raising capital, you need to first prepare an effective business plan that you will show to your investors. A business plan is a document that outlines the description of your business, the objective, the mission statement, the business goals, costs, expenses, staff and everything concerning your intended business.
Top 7 Ways To Raise Capital For Your Business
Here are top 7 ways to raise capital for your business:
#1. From your savings
The very first step to raising capital for your business is to commence on a savings scheme to this end. You can’t just decide to go into business without having any source of personal funding whatsoever. To do is to make people perceive you as not being goal-driven. Although, raising capital from savings is usually seen as best for the income earners: this is wrong. Everyone gets some kind of cash flow; however unstable that may be, but one nonetheless. If you focus, you can dedicate a percentage of whatever cash comes in for your personal expenses. It’s actually these little things that matter at the end of the day. If you can consistently put away some money every time it comes in —no matter how small, you will slowly build up some kind of capital. Now it may not be enough, but with that kind of money at your disposal it is easier to attract more funding from Angel investors.
Again, it is way easier to convince your family, friends, investors, banks and other financial institutions if you already have some of your own money ready to be invested in your business.
#2. Get a partner with lots of disposable cash.
Okay so you’ve got the idea, the brains, great skills and all that is technically required for you to implement your business idea —but the cash. So what to do? Easy. You need to partner with someone who needs a business to plunge into but doesn’t have the skills to run one and has got a lot of money to spare. This is a win-win for both of you because you both get to have shared ownership of the business. When you have a profitable business idea and have a partner who will contribute the needed capital; both of you bring something to the table and can share ownership of the business.
So many big and successful entrepreneurs actually started out by partnering with people who were ready to bring in the capital requirements for their startups.
#3. Business grants and loans.
Government institutions and international organisations regularly set up several grants and loans to support small and medium scale businesses in Africa. And this is largely due to the fact that small businesses generate a lot of employment, improve local technology and generally enhance the development of the economy. Hence, there are tons of grant and loan offers open to smart and intending entrepreneurs.
Top 7 Ways To Raise Capital For Your Business
#4. From family and friends
It is quite easier and better to start a business with this kind of fund alternative. To raise the capital you need to start up your business, your family and friends should be the first port of call. And if you are credit worthy, your friends and family will be more than ready to help you raise the cash you need. The good thing about this source of capital is that most times your friends and relatives may not even demand for you to return the money, and in cases where they do; you may not be required to pay any interests and the general condition for the repayment of the loan will usually be flexible.
#5. From sales of assets
Your assets are belongings or property that have value. And these assets are a good source of capital because you can either use this as a collateral when applying for a loan, or it could be sold to realize the capital you will need to start up your business. Some of your assets which are not being fully utilized can be put up for sale in a bid to raise money to start a business. Assets such as buildings, machinery, landed properties, etc can be converted for cash for business’s capital requirements.
#6. Angel investors.
Angel investors are just philanthropists who have interest in financing businesses. In addition to the capital they invest, angel investors are always known to provide coaching and mentorship which you will need for your new business. The major requirements from “angels” is a detailed and strong business plan and also an ownership stake in your business. But generally, angels are just very rich individuals who enjoy helping entrepreneurs with their business ventures, should they be good and credible enough.
Top 7 Ways To Raise Capital For Your Business
#7. Use crowdfunding
Crowdfunding is a capital-raising platform which allows a large number of people to place a small amount of money into a project. The ‘crowd’ acts as a network of small investors strengthening a business’s growth plan. All you need do is to be able to choose the right crowd funding platform.
First, you start by presenting your business idea or proposal to a ‘crowd’ by posting it on a website provided on that particular forum. Your proposal has to be good enough to convince potential investors and also offer them a certain percentage of ownership should they go ahead and invest.
Below are some crowdfunding platforms you can try out to get capital for your business;
- com
- com
- com
- org
You can always look up for more using search engines on the web. The most important thing here will just be your ability to convince your potential investors.
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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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Elizabeth
U are doing a great job here. I need money to start my own popcorn and liquid soap business.