One day you’re in the shower just getting ready for work then the proverbial light bulb just goes off in your mind. Whether that eureka moment brought about an inventive new way to do things or it presented a solution to an obstacle people had to get around doing or you realized you could make something awesome and sell it one thing is for certain, that idea is definitely worth pursuing.
People have ideas all the time, some are crafted from experience, and others take long moments of thinking and analysis before getting there. A lot of the inventions we enjoy today are a result of that wonderful thing in our heads called our brains. Now that you have that brilliant new idea that hopefully no one else has thought of it’s time to make it happen, start up your new venture and see the results happen. By results it may be saving the world, getting enormously rich or having your name immortalized in history. If only it were that simple.
Unfortunately getting your idea into action isn’t that simple and it takes a lot of efforts to execute on it and make it happen. The traditional route is to fund the startup yourself out of your pocket or by securing a loan from a bank. Another way is to get people bought-in to your brilliant plan and then have them help you fund it by investing in your startup. The problem with the former is that loans for businesses take a long time to process and banks are not exactly the most open to new ideas or to startup companies and would want to see a steady growth trajectory first. The latter idea is fine but it takes a lot of energy and time to convince the right people and sometimes going through this route may stifle your vision of how to run your startup.
Don’t worry, in this day and age there are other ways to get your startup off the ground or if you’ve already taken that step these methods can help you grow and scale your business to the greatness you’ve always envisioned.
1. Ask the Internet for help through Crowdfunding
Making dreams turn into reality is fashionable these days and people on the Internet have taken notice of this trend of startups and being self-made. Sites like Kickstarter and Indiegogo have been set up for the sole purpose of connecting startups with investors and they make some good money doing so with fees for successful transactions.
2. Pray for an Angel. Investor that is
Angel investors are individuals who are looking to personally finance startups with great concepts and ideas. These individuals may have benefited from their own startup and have a deep belief in the power of an idea. An angel investor would want some equity in your company and will also look for some return on their investment but normally they provide an approach that is more conducive to what you envision as a startup.
3. Try an online lending site
Online lending is starting to become a trend. Australian financial companies such as InfoChoice and Lending Post provide business loans quickly and conveniently since they are more adept in today’s online standards. Online lending companies find this business model profitable because of lower overhead with no physical branches, transfer of money and receipt of payments are all done electronically and the screening via credit scores can also be done virtually.
4. Preselling the product
This method of getting funding is dependent on 2 very important factors. The first is that you should have a solid concept with all the rules outlined, especially when you are selling a service or a subscription. If you’re selling an invention, having a working prototype is imperative to getting this off the ground. The second factor is you need to provide an incentive for people to pay ahead for the product. Whether it’s for a huge discount or whether you provide exclusive access only to the first group of elite subscribers, this needs to be clear. Also, you need to deliver on your commitment of course or you can forget about doing this in the first place.
5. Friends and family are always there
If you’re really very convinced about your startup and you know that it will take off and you can handle the pressure then feel free to approach your own angel investor, your friends and family. This gives you access to some resources with very little or maybe even no interest at all. It is extremely important that you keep the communication lines open as far as updates are concerned about your startup and if you have multiple outstanding loans that you pay this off first so you don’t burn any relationships with the people that matter the most to you.
6. Borrowing against your invoices
If you don’t want to go through the screening process and high interest rates of a loan and you’re already operational, you might want to consider factoring or invoice advancing. This model won’t work for a startup that’s still in concept because essentially you get some advanced money while waiting on your invoices to get processed and paid by your client. This helps you replenish inventory and get over that initial hump that startups need to painfully feel.
7. Business Loans
This method is similar to number 6 but has several distinct advantages. PayPal now uses its infrastructure and its online leverage to draft out creative small business loans to its users. A small business that’s already operational and processes its payments for sales through PayPal could be eligible for this small business loan product. Since PayPal already keeps track of your revenue and since you’re actively using their service, the application and screening process is simple and literally takes minutes. Repayment of your small business loan is also very convenient as it is deducted from the sales payments made through PayPal. This method also doesn’t break the bank as a portion of your PayPal sales goes towards repaying your loan. If your business slows down you repay slower, and if it picks up, you pay your loan off quicker.
8. Venture with a venture capitalist
The concept of a venture capitalist has been around since the dot-com days of the 90s but this method is still dependable and a solid alternative to traditional means. This is also recommended for a small business on the cusp of expanding, essentially if you have a business plan for that growth and an exit strategy you can go to these companies that manage a pooled fund entrusted to them by smaller investors wanting to cash in on a profit. The venture capitalist is responsible for screening your startup’s concept, strategy and operational management and can provide a large amount once you pass all the steps.
9. Getting a grant or government assistance
If your startup is creating a revolutionary idea that can benefit the country, like in science or research or renewable energy, then a grant may be available to help you pull it off. Aside from the government there are organizations that seek innovators who hope to make an impact on the world through startups. Do some thorough research and you can find funding that won’t cost you an arm and a leg since they will normally come from non-profit organizations whether they are publicly-funded or privately-funded.
10. Trim the fat, sell your assets and cut your expenses
Going into a startup is a major step in your life that requires an enormous amount of commitment and conviction. If you’re at this stage looking for funding then you overcame that earlier stage where you were questioning yourself on whether you can pull this off or not. Congratulations on getting this far but now you need to back it up even more by making some personal sacrifices now for the sake of the future. Sell some assets, if you have too many cars, a boat you only use a few months a year or possessions that don’t fall into the realm of necessity, then sell them off and use the funds to help your startup become great. You’ll need to tighten the belt while you’re in this phase rife with growth pains. Weather this storm and hunker down because good, no, great things are coming.
With these creative methods to fund your dreams nothing can stand in your way to become that next billionaire who changed the world.