5 Things You Can Do To Fund Your Business Plan
So, you’ve just finished laying out your business plan with pen and paper and it looks good. Then, you realized that you don’t have sufficient funds to be able to fund it. What should you do?
Here are 5 possible ways you can secure funds to power your business plan and make your own business realistically possible.
1. Find A Side Hustle
A side hustle is a business or job that you can do, aside from the regular work that pays you a monthly salary. Many people do this so that they can earn some money on the side.
Almost everyone can see the logic of having a side hustle, but not everyone can do this. This is because sometimes your regular job can take up so much of your time and energy that you aren’t motivated to find a side hustle. But, if you want to jumpstart your business plan, a side hustle could be the answer.
This option works well for small business founders who have a lot of talent to pursue their side hustle with.
2. Take Out A Loan
If your side hustle hasn’t panned out well, it’s always possible to take out a loan from someone or some organization. For starters, you can borrow from friends and family. This is a common route taken by many small business founders because friends and family are the ones who trust you the most. As a funding option, family and friends are also good because they won’t require you to repay them right away. But, be sure to make a repayment schedule so that you can keep up with payments of the loan.
If you don’t want to (or can’t) borrow from family and friends, you can look for finance organizations that are open to lending to the public. Many financial institutions, like banks, are open to lending to small businesses, provided you have proof you can repay the loan. Make sure you meet the requirements of the lender beforehand so that you know what documents to present to them, and convince them you’re a good risk.
A third lending option is to borrow from your present employer. Some employers may offer small loans to their employees, though there are requirements such as being a regularized employee, earning a certain level of income in the company, and not having a derogatory record. This allows employees to stay financially stable especially during emergencies.
Also, you may have to look for a colleague in the same company who’ll serve as guarantor of the loan from your employer.
3. Sell Pre-loved Things
You can also try to sell something that you own, and use the proceeds to fund your business plan.
For instance, if you own a car, you can sell your car as a second-hand. If you own a large house, you can put your home up on the market and move into a smaller rented apartment.
The point is to raise funds that you can funnel into your small business. As a tip, you should have a contingency plan in case your business fails or you run out of funds to keep running your business.
4. Look For Venture Capitalists
Venture capitalists are people that would like to invest in start-ups and small businesses. They can invest in your small business in exchange for a share of the profits and sometimes for control of the company.
This appeals to small business founders who want to set up their business right away, but don’t want loans or can’t sell anything to bring in additional funds.
If you don’t mind having a venture capitalist dictating part of your company’s direction, then you can seek out investors who have ready cash to invest with.
5. Pre-sell Your Company’s Products and Services
This simply means finding customers or clients before your company has been set up, and sell your company’s products and services to them in advance. In return, those customers or clients will pay you for the products and services they intend to avail after the company is up and running.
This is not a common practice, but if you want to retain control of your business, yet still have money coming in for setting up the company, this could be the right option.
Funding your business plan is a major decision that’ll influence your actions for a long time. One way to fund your business plan is to find a side hustle if you’re talented enough for that. You can find a person or organization willing to issue a small loan. Sell something valuable to raise enough funds to fund your small business.
You can even pre-sell the products and/or services that your new company will specialize in, in exchange for funds that will allow you to set up the new business. Just be sure you’ll definitely honor your obligations so that people will trust you with this kind of arrangement.