Home » Life Tips » Money » 10 Ways to Earn the Capital You Need for Your First Business

10 Ways to Earn the Capital You Need for Your First Business

Earn Capital for New BusinessDo you dream of owning your own business? If so, and if you plan to turn that dream into reality, you need to be aware that there are startup costs involved with any business.

Obviously, if you’re going to open up a store or other physical establishment, you’ll have to have the money to rent or buy a commercial space. Even online businesses will take up “space” on the web, which can cost money. If you’re making and/or selling goods of any kind, you’ll need supplies. No matter what type of business you start, it will be necessary to have some funds up front (Read: Make Money Online in 9 Different Ways).

Knowing exactly how much you’ll need in terms of capital can take a little work. Sit down and make a list of all the items you’ll need to successfully get your business off the ground. Then, do your research to come up with valid estimates for how much you can expect to spend for each item.

Once you have a clear idea of how much money you’ll need, you can start looking through your savings to see if you have enough money. If you’re like most people, you probably won’t have all of the capital you require. Luckily, there are some proven methods of earning capital for your business.

  1. Seek help from loved ones. A lot of people believe that you should never mix business with pleasure. These are the people who will strongly warn you against asking friends or family members to invest in and/or provide start-up capital for your business. Though there are some legitimate reasons why going into business with friends or family might not be the smartest idea, the truth is that your loved ones are some of your greatest resources when it comes to starting your business.

    Don’t be afraid to approach trusted loved ones and ask if they would like to make a small investment in your new business. If things take off, you can pay your loved ones back with interest in no time at all.

    Only approach people who are supportive and who believe in you, and then hold up your end of the bargain by always making good on your word. If you promise to pay a loved one back within a certain timeframe than make sure you do it. If you’re honest and trustworthy, you can keep things from ever turning sour.
  2. Borrow from the Small Business Administration. Many new business owners end up taking out loans to get their businesses off the ground. Though these loans often get a bad reputation, there’s really nothing wrong with them. Just be sure that you secure yours through a quality lender and that you only agree to repayment terms that truly are realistic for you.

    One great lender to consider is the Small Business Administration (SBA). This reputable organization offers loans in amounts up to $150,000. Though the organization can be choosy about who it lends to, the repayment terms are some of the best around. Plus, in most cases, you can get a decision within a few days.
  3. Head to the bank. If you’re turned down for a loan from the Small Business Administration, or if you decide that lender just isn’t the right fit for you, you can always turn to your bank. You’re a lot more likely to be approved for a bank loan if all of your accounts are in good standing and if you’ve been with your bank for a long time. In other words, this definitely isn’t the time to switch banks! Also you’ll want to make sure you have a decent credit score before you apply. [Read: 8 Steps to Improving Your Credit Score]
  4. Good old fashioned fundraising. Remember how in high school you’d hold a bake sale or a car wash to raise funds for a class trip or a vending machine in the school cafeteria? Bring that idea into adulthood! Whether you want to sell samples of your product or solicit donations in the community, good old-fashioned fundraising can put capital in your pocket!

    There are also many online sites that allow you to tell others about your idea and then to request donations from those who believe in your business plan. Do your research to find sites that cater to your business type and then find creative ways to get your idea noticed and get the right donors involved. Offering an incentive, like free advertising on your new business website, can really get the funds rolling in.
  5. Don’t discount your credit card. Many new business owners are wary of using their credit cards to back their budding entrepreneurial ideas. Being a little cautious with credit is definitely smart, but don’t be so cautious that you overlook a wonderful opportunity. As long as you have a credit card with decent interest rates and as long as you don’t get into too much debt, borrowing via a credit card can be a viable way to get your business off the ground.
  6. The Holy Grail of investors. Aptly named “angel investors” can prove very helpful to the new business owner. These are investors who may offers funds, advice, and/or other services in exchange for a stake in your organization. Obviously, it’s not good to have too many angel investors who are looking to get more than they give. But if you’re selective about the investors you work with, this option can prove incredibly useful.

    Even if you don’t get straight cash from your angel investors, you could land an office building or help with creating advertising. Sometimes, donated services or goods are even more valuable than cash since they can help you to save money and can play a large role in making your new business a sure success.
  7. Always be on the lookout for new opportunities. The worst thing you can do when starting a new business is to keep quiet about it. Be that guy (or girl!) at the party who tells everyone and anyone who will listen about your business idea. Sure, you might be labeled as “annoying” for a little while, but chances are you’ll find at least a handful of people who are enthusiastic about what you’re doing and who may wish to invest in your idea.
  8. Venture out. If you need help securing that last little bit of money for your business, or if you haven’t had much success with the other tips presented here, you may wish to turn to venture capitalists for help. These individuals will often provide you with money and more to be used toward your business, but do be aware that they get a percentage of your business in return. Just as you need to be selective when choosing angel investors, be choosy about the venture capitalists you select and don’t take on too many.
  9. Enroll in an entrepreneurship program. Entrepreneurship programs are designed to help people learn about the business world and about how to successfully operate within in. Not only can you learn valuable skills from enrolling in one of these programs, but you can also make important connections—connections who might just be willing to offer capital for your budding business.
  10. Save, save, save. While a lot of these tips ask you to look outside of yourself for the capital you need, don’t forget to play your own part. Save money where you can and put it aside for your business. Whether this means doing away with cable television for a few months or eating in instead of out is up to you. Just remember that if you play your cards right, you can earn back the money you invested and then some.

Comments

comments

Leave a Reply

Your email address will not be published. Required fields are marked *

*