That light bulb of inspiration has flicked on, you’ve slaved over your grand business plan and got the entrepreneurial gears whirring, but now comes the tricky part – how are you going to pay for it?
Finding finance for a startup is a major hurdle, and one that few budding entrepreneurs manage to overcome. This is even truer ifyou’re lacking in business experience. A great idea is a powerful tool, but only when a veteran mind can back it up.
However, that doesn’t mean you should lose all hope for your dream company. Instead, find a few alternative ways to finance your business. To get you started, here are a few tips.
Find the alternatives
Since the economic meltdown of 2008, the world of alternative finance has blossomed to hold its own against the banks, like David versus Goliath transforming into Godzilla versus Goliath.
An umbrella term covering construction finance, crowdfunding (more on that later), invoice discounting and many more, alternative finance is generally more sympathetic to niche markets, finding new ways to communicate with small businesses.
With the growth of this market, there could even be specific finance options to improve for your niche sector.
Move with the crowd
Crowdfunding has grown from cult internet sensation to billion-dollar enterprise, pushing thousands of projects off the ground.
Sites like Kickstarter, Indiegogo, Patreon and Gofundme are just the tip of the iceberg, with many more springing up every week to give your business idea the chance for funding.
In essence, crowdfunding involves you placing your idea onsite and hoping that people find it interesting enough to give you cash. In return, donators get to see the production of something that interests them.
While this surge in popularity has led to crowdfunding becoming a hugely competitive arena, it’s still a meritocracy in which the good ideas float to the top. Hone your proposal to its core and you might find a ton of donations coming your way.
If you’re an idea’s person with nothing but moths filling your pockets, then one of your best bets is to find a wealthy patron to make your partner. While they pony up the cash, you’ll be able to focus on your business operations.
More than this, a decent partner will act as a sounding board for your ideas, allowing you to weed out the good from the bad. But if you don’t want to share the reins, find a silent partner who’ll give you cash but keep quiet about the business.
Just bear in mind that with a silent partner (or partners), the responsibility for a business going belly-up is all yours – and your partners might not be best pleased when left out of pocket.