Starting your own project is a risk, and finding your own finances does not always give a positive result. When you think about how to find the money for a business, dozens of options immediately arise in your head. You often think to borrow from relatives, go to a bank for a loan, rent a room, or sell a house or a car. But how to choose the appropriate method?
6 tips on where to get funds for starting a business
Here are some tips for a budding entrepreneur. We will analyze 6 options where and how to get funds for a start-up business.
Borrow from relatives, friends or acquaintances
The first thing a novice businessman thinks about is to borrow a few funds from someone. Your friends or relatives can have impressive savings, and you do not think long about where to get the starting capital. But if there are other options, then it is better to refuse this method, and we will explain why.
Relatives and acquaintances will have to be persuaded to make a down payment. If the business suddenly burns out and finances disappear, then relations with friends and loved ones can go badly. The money will have to be returned in any case. If you delay the repayment of the debt, then there is a risk of being left without friends and ruining your connection with your family. Remember that loved ones are more precious than money.
Get a loan
Finance for business can be obtained from the bank. The institution gives loans for furniture, an apartment, a car, repairs, leisure or treatment.
Short term small business loans are easier to get from a microfinance organization, where they give microcredit around the clock, without guarantors, interest and credit cards or in cash. In the bank, you need to provide a guarantee, positive credit history and information about stable income. But business money at interest is an additional risk, which will be a heavy burden from the very beginning of the project. And if the business burns out, then you can be left without business and with unpaid credit.
Sell real estate
It is one of the most serious steps to find the money for a small business. Apartments and cars – the property that can provide financial support. To open a business from scratch, then real estate and movable property can become start-up capital. When you need money for a business, you can sell such property:
If you have a normal car, then you can get a significant amount for it almost immediately. This capital is enough to start the project. In this case, there is a risk of losing property, but you will not owe anything to anyone. And if you think where to get money to start a business when there is no car, then there is a second option.
Property in which there is no special need. Country plots are like dead money if they are idle. Small business is an affordable occupation if you can borrow money to open a business from your own stocks. If there is a land plot near the summer cottage or it is located in ecologically clean areas, then it will be possible to get decent capital to start the project.
Receive money from the state
The main value of any country is its people. The state has developed special programs that help to get seed capital for business.
Every month we pay utility bills. A certain amount is spent on this area, and in the cold season, it becomes larger. The subsidy pays part of the communal, which means more personal money will remain in the wallet.
Capital for a business project
The authorities allocate finances so that small and medium-sized businesses can grow. If you are thinking about how to get money from the state for business, then remember that the presence of a business idea does not mean that you will get start-up capital. Write a business plan that roughly calculates expenses and revenues when it pays off. A state loan is given if the entrepreneur regularly pays taxes. When there is debt, the business plan may not even be considered.
Sell unnecessary things
Think carefully about what unnecessary things you can sell. Proceeds for used equipment, clothes, shoes, and crafts – a worthy starting capital for opening a small business.
There are hundreds of sites on the Internet where they post ads. The main thing is the selection of photos of good quality. No one will buy an unknown product. In addition to the network, you can try your hand at flea markets, in thrift stores or arrange a home sale.
Rent a property
This option is suitable for those who have an apartment, house or cottage located in a sought after area and you have other housing. To make money for your business, you can rent such property:
Rent a car under a taxi
Passive earnings that can bring good money. The car remains your property, while others work for you. Call a taxi service, which has been on the market for many years and has a good reputation. Make a formal contract and be sure to make insurance. After renting a car, visit a company. Go through scheduled maintenance so that the vehicle lasts longer. Thus, you can save up money for your own business.
Summer cottage for rent
The method is justified in terms of finance. Usually, suburban areas are rented for an advance payment and for 2-3 months immediately. If the cottage is located next to a forest or river in a clean place, there will be many who want to spend the summertime there. You can get money for business development if you yourself move to the cottage in the warm season. Then you will rent the apartment.
There is no single correct answer to the question of where to get funds for a business. With your favorite, well-paid job, stable earnings and social benefits, you don’t have to think about a loan. But this does not happen to everyone.
Unstable income, lack of savings push a newcomer to the business to look for the required amount in different places. Follow a few simple rules to make better use of finance search methods:
- Neat appearance. The face of a person is his business card. Friendly and nice people often get help.
- The correct approach to the request. Remember that a person can refuse and accept the negative answer normally. Do not throw tantrums, especially if you ask for money from friends or acquaintances.
- Mutual assistance. Offer the other side mutual benefits to get a positive result.
Relatives, friends, acquaintances, and even banks do not give loans free of charge and debts will have to be repaid. Better not get carried away with it all the time. Contact only when necessary. Set priorities and be successful!