Potential business people and
creative thinkers will often have amazing business ideas, but they put them on
hold due to lack of funds. They know that their idea(s) will not go far off the
ground unless they have some funding behind them.
Access to start-up funds remains
a nightmare to many would-be successful entrepreneurs. Most banks will not
agree to loan a business that is at the “idea” stage and when they do, the
amount of interest rates they surcharge can send an already struggling business
to an early deathbed. So what options can one pursue? Today I will discuss 5
debt-free ways to raise start-up capital.
1. Crowd Funding
Crowd funding is simply
conducting a mini-fundraiser where you convince donors and people of good will
to finance your idea. Unlike the typical church fundraiser you may be familiar
with, crowdfunding can be done online.
You simply go to websites like gogetfunding, babandu, m-changa or kickstarter and upload a very inspiring story of
you and your business. If your proposal appeals to people and involves them
emotionally, then you will have higher chances of getting fully funded.
The good thing with crowd funding
is that it’s free money and you don’t have to worry about the burden of
repaying it with punitive interest rates. The only downside is that
crowdfunding is quite competitive.
2. Bootstrapping
You don’t always have to start
the business with capital that covers all needs. You can start with whatever
little you have and try to survive within your means.
In that case, you will be
ploughing back the profit and growing your capacity without necessarily going
for loans. Although bootstrapping is not easy, it can be a safe starting option
especially given the fact that risk of failure is always there during the first
few years of operation.
Just figure out how to do
everything within budget and efficiently because even if you raise money through
other means it will still run out and you will still have to operate with what
is available.
3. Offer Cheap Consultations
Everybody is an expert at
something. Even if you are a school drop-out, you can still be an expert at
say cooking, dancing or even knitting. If you are a form 4 drop-out you can
offer expertise in say Early Childhood Development learning, animal husbandry or even basic mathematics
– and so forth.
One way to raise money for your
dream startup is by tapping into these talents and skills and offering cheap consultancies.
Altogether you end up making some money from these engagements and get an
opportunity to create long-term relationships with potential clients which
could even save you a tonne of shillings that would otherwise be spent on
initial marketing budget.
4. Take Up Part-Time or
Short-Term Employment
There is nothing wrong with
working and saving money. In fact, this is the method most successful
entrepreneurs today used to start their businesses.
Toiling for your money will help
you not be wasteful. In addition, you will have time to learn some of the best
practices of running a business and you can even use the opportunity to create
essential contacts.
There are even more benefits to
be reaped if you get employed within your respective industry because that way
you will be earning a salary as you learn a few insider tricks.
5. Raise Money from Potential
Customers
This is a simple but smart
strategy for financing a business. You simply approach a few of your potential
customers, showcase your products to them and convince them to pay an up-front
fee or deposit to get the job done.
For instance, let’s say you have
an idea of this great website that would help company XYZ to operate more
efficiently. So you simply approach company XYZ, show them a demo of the
website and once they place an order you request them to provide a deposit.
Here you can use the language of
“I will give you a 20% discount if you pay an upfront fee.” Once again, a very
simple trick that can go a long way in helping you overcome the challenge of
raising initial capital.
Final Word
There are many ways to raise
start-up capital out there, but unfortunately most ordinary people don’t know
about them. Feel free to consult us for help or share your ideas with us at biasharainspirations.
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