You’ve gotta spend money to make money. It might be a tired old cliche, but when it comes to small businesses and startups, it still rings true. These days it’s very hard to get anything or anywhere on goodwill, thus if you are in the midst of building your business, you are going to need money to fund everything from the website to the coffee maker.
There are countless options out there for funding, the most popular of which are third party investors, bank loans and self-funding. In the modern day, however, you’ll find that there are other ways to get the money you need and in this article we look at three creative ways you can gain funding for your business.
The Link Builder: Competitions
With the modern concept of a startup becoming an important part of the business world, more and more companies and organizations are setting out to find the best and brightest ideas amongst the crowd. To do this, they run competitions that allow you to pitch your idea and those that are judged to be the best by whatever category they are being judged under (innovation, industry specific, money saving, life altering, etc.) will be awarded.
These awards come in many forms, from cash prizes or investments to guidance and partnerships. Entering these competitions not only allows for the opportunity to impress the judges, but also the investors and industry experts who attend these events.
The New Generation: Crowdfunding
Following the dawn of broadband, Crowdfunding websites have become capable of turning one man’s lonely basement idea into a million dollar company.
Crowdfunding has existed in some form for hundreds of years. In fact, the Statue of Liberty stands on a plinth paid for by crowdfunded money following a call for support from a local paper. However, it has only been in the recent decade that it became a popular method of funding projects.
Now, multiple sites exist out there that allow you to address the masses with your idea for a business. In return for investment, you can offer rewards—such as updates, unique opportunities and free goods once the company is successful—or even shares in the business.
This is an excellent way of building up startup funding, as you don’t have to make repayments and you don’t have to convince an investing mogul that your idea is highly profitable, you just have to convince the public that your idea is a good one worth investing in.
This is where crowdfunding reaches its limits, however, because while it’s a brilliant platform for getting funding for innovative products or ideas, if you are looking to start a shop or something with a corporate feel, you won’t find much love here.
The Risk: Credit Cards
Sometimes, you just can’t get a loan, you can’t find the right investor and you don’t have the savings to be your own investor. This doesn’t mean it’s the end of the line for you and your idea, but it does mean you’ll have to bite the bullet and make a leap of faith.
The thought of funding a business with credit cards is enough to give even the most confident entrepreneur a feeling of unease, but it doesn’t need to. Credit cards aren’t something you should consider lightly; they come with a level of personal responsibility akin to a bank loan (because it essentially is one) but if you educate yourself and learn about the ins and outs of using credit, then they can have a range of benefits for your business.
For starters you don’t need approval, almost anyone can find a bank willing to give them a line of credit. You also don’t have anyone else to answer to, as it is similar to a self-funding. Now you have immediate access to money that can launch your business, and turn you into the success nobody else thought you could be; just make sure you don’t miss the repayments.
Author: Russell Smith, a chartered account from Leed in the UK, is a highly qualified professional with over a decade of experience running his own accountancy firm.