One of the most vexing steps and a potential idea-killer in starting a business is the issue of raising money. Financing is often a problem that dissuades most people from even trying to put up a business.
Often, when the subject of financing a business comes up, people think about loans, but there are other ways of raising money for your business. But before going around raising money for your business, know how much you actually need to start a business. This is where your business plan, specifically the section on financial planning, enters the equation.
The financial plan will tell you how much you need to start and maintain the business. As a rule, you must raise enough money to start up and sustain the business for a few months -- six months to a year -- while you are trying to introduce your product to the market.
1. Personal Savings
Your personal savings is the first thing to pop in your head in starting a venture.
Tips: If you plan to use your savings as funding source, start with a small business venture, like a buy-and-sell business, and use the proceeds of the business to grow it.
Try not to dip into your savings a second time.To grow your savings and thus your funding source, explore investing your savings in a high-yielding financial instrument, like mutual funds, to grow your money faster.
2. Property Sale
Besides dipping into your savings, you can try selling some of your property, including your car, jewelry, antiques, furniture, phones, even memorabilia and collectibles like hard-to-find comic books.
Tip: You can dispose of these items, especially antiques and memorabilia, either by organizing a garage sale or by auctioning these items on Websites like eBay.
3. Borrowing from family or friends
Next to savings, a very popular way of raising funds is borrowing from friends and relatives. This kind of fundraising is popular because borrowers often get a little to no interest on their loans, has optional collateral requirements and very flexible payment terms.