Accounting & Finance
4 Ways to Make Money to Fund Your Small Business
When you realize your small business dream is possible, your entrepreneurial spirit is rewarded. With a business where you can make your own hours, manage your personal responsibilities, and create the work-life balance life doesn’t get any better.
So what’s stopping you from turning your business dream into a reality?
The one thing that may be holding you back is funding for your small business. You’ll need some money to get started and then keep you going until your sales revenue provides the profit you need to grow the business further.
While there is a lot you can do for free to get started, to operate your business, you’ll need investment for setting up your business systems and Apps, as well as a website and you may need inventory if your business is product-based.
Plus you’ll need working capital for operating costs that may include staff wages, workspace rent and paid marketing strategies to grow the sales pipeline.
Business Funding Ideas
If you need to fund your small business, here are some ideas to consider.
Invest in Stocks
One way to get money for your small business is through funding with stocks. To get started, learn more about the stock market and make educated decisions on which stocks will give you the return on investment that you’re looking for.
When you make the proper moves and practice patience, you may end up with the capital, you need to jump-start your small business without any loans.
Take Out a Small Business Loan
While you may not love the idea of having to start your small business with a loan, it’s a popular way to fund a startup.
Loans give you the capital you need right away so that you can immediately start working on your business and generating income, which means you can pay back the loan sooner. Also, while you’re not using all the loan immediately, you may find ways to for it to make money in the interim. For example, a high-interest investment, where the interest paid is much higher than your loan interest. Thoroughly research investing options and seek independent professional advice before taking out a loan.
Here are some traditional small business loans you can choose from:
SBA 7(a) loans
SBA loans are for businesses that are unable to get more traditional lending from a financial institution. SBA loans are reserved for small businesses and startups.
The SBA itself doesn’t lend money to small business owners directly, but it does guarantee loans for small businesses from a range of partners and commercial lending institutions.
Small business grants
Small business grants are worth a look. If you’re operating a non-profit, or a veteran consider looking into small business grants to fund your startup.
Business lines of credit
This option is a loan you secure where you only take the amount you need. If you don’t use some of the available funds, you do not have to pay interest on that quantity.
If you or your business falls into a specific category or demographic, you may qualify for speciality loans. For example, the U.S. Small Business Administration helps women-owned businesses secure loans.
Secure Venture Capital
Reach out to venture capitalists with your business idea and projected earnings to see if they are interested in investing their money in the company. Investors are taking a risk, especially if you don’t have a lot of history running a small business, but once you become successful, they can expect a good return on their investment.
Crowdfunding is putting your business idea out to the public and asking for funds to get started, usually by providing an incentive to investors once you meet your goal. You can ask for funds from family members, friends, investors, and potential customers. This will help you get the capital you need to start your business on the right foot.
Starting a business will test your resolve to deal with challenges such as how to get customers, workers and investment, but that’s why we do it. Being an entrepreneur is invigorating, so embrace it and remember once you have funding available, your small business can get started and go on to be a success.