Small Business Funding Ideas
Written by Eddy Hood
People often have interesting and creative ideas for new businesses, but a lack of funding may stifle their launch. In the past, raising the capital to start a business meant hours of work creating business plans and presenting them to investors in the hopes of getting the necessary funds. While a solid business plan and proper planning are still essential, obtaining funding for new business ventures has become less of a hassle than in the past. As support continues to increase for small business owners, different avenues of funding have opened up, making it possible for more people than ever to bring their ideas to fruition.
Look for Grant Opportunities
When looking to finance a new business, one of the best options is a grant. With a grant, the money is provided to put towards a startup, free of charge. Grants can be difficult to find but it is always worth looking into. There are federal, state, and private grants available, some of which are based on the theme of a business. For instance, minority business owners and women may qualify for special grants. Grants generally require a lengthy application process including proposals that can require an extensive amount of work, but the result can be well worth it.
Take Your Specific Business Into Account
Being able to define your business niche can help a great deal in gathering funding. You will be able to research and approach investors that take a specific interest in what your business plans to offer. Once you have defined your niche, it will be easier to summarize your business and easily identify what sets it apart from other similar ideas. If your business will provide services for an underserved area, for instance, there may be a specific grant or funding opportunity to help establish your new venture.
Look Into Crowdfunding
Recently, crowdfunding has become a popular way to get new ideas off the ground. Sites such as Indiegogo and Kickstarter provide a platform for people to raise funds for their business ventures. Because crowdfunding has become so popular, there is increased competition so it is important that ideas are creative enough to catch the attention of investors.
Find a Contest to Enter
This may sound like an odd way to finance a business, but contests are an option when looking for funding. There are a number of contests throughout the US that promote innovation by offering a big financial prize to winners. When entering a contest, chances of winning will increase if your ideas are able to stand out in a crowd. Depending on the contest, you may have to present your ideas through an essay, or possibly present the idea in person.
Seek an Angel Investor
Angel investors are people that provide funding for businesses, generally in return for a sizeable stake in your company. If you're comfortable with handing over part of your company, an angel investor is a good option for funding. Once the decision has been made to go with this type of investor, you will have to find one who is willing to fund the type of project you are working on. Places such as the Small Business Administration can help connect people with investors. There are also several websites that can offer information on finding an angel investor.
Take Out a Small Business Loan
One of the more traditional ways of funding a business is to take out a small business loan. In order to obtain a loan, you will have to provide details of your business, including information on exactly how the loan money will be used. Community based banks are a good place to start, as they have a better understanding of the community and how your business will fit in.
It takes a great deal of hard work to get a new business off the ground. With the proper information, and a strong business plan, it is possible to create a successful business, and find the financing needed to do so.
Startup Funding Resources:
- Small Business Loans and Grants
- How Startup Funding Works
- Startup Funding and Investing - Angel Investors
- The 10 Most Reliable Ways to Fund a Startup
- Crowdfunding - Kickstarter
- How to Find Angel Investors For Your Startup
- What's an Angel Investor?
- Funding a New Business? Don't Bother With Banks
- 5 Ways to Fund Your Small Business