Do you run a small business, or are you looking to start one? If so, it’s important to ensure there are sufficient resources to get going, maintain the business, and expand capacity.
But where can you find the finances? Fortunately, securing the cash to achieve your business goals can be easier than you think! In this article, we’ll introduce you to four of the best investment sources for your small business.
The most straightforward method of securing business finance is to use personal savings. The key benefit to this approach is that there are no other parties to please. With a traditional investor, a business owner may need to sacrifice some of their autonomy in order to secure funding. By funding independently, you are able to retain full control of the business.
There are risks, however, Using personal savings can make a substantial dent in your safety net. Never jeopardise more than you can afford to lose, and make sure to factor in your current and future responsibilities before releasing the cash. For example, you must be able to cover mortgage payments, bills, and other expenses, even if the business fails.
Still, this approach is the most straightforward and least complicated, and a great option if your initial outlay costs are relatively low.
Some business owners choose to have an outside investor. This could be one person, a consortium, or another approach, known as crowdfunding. As the name suggests, raising the cash is a group effort, but the arrangement of investors is unique. Using an online platform, anyone with the money to invest can be part of the funding group. Investors needn’t be known to one another, and they usually aren’t.
Often, the rewards for investment are different to the traditional approach. Instead of dividends, investors may be rewarded with products, offers, or exclusive content. This means that you retain control, without having to factor in regular financial dividends, depending on the terms you agree with your investors. It’s easy to get started, using one of the many online platforms.
Friends and family
If you don’t want the complication of outside investors, but still require some additional funds to get going with your business, it can be worthwhile to approach family and friends. People looking for an investment opportunity will usually be interested in working with someone they already know, and it can sometimes be easier to explain a business idea to a friend than an otherwise unknown investor.
Of course, there are possible downsides. Mixing professional and personal lives can cause conflict, and if anything goes wrong, it may have a detrimental effect on the relationships at play. That said, a friend or family member can not only be a useful investor, but a helpful mentor too, particularly if they come from an entrepreneurial background.
A business loan
If you don’t have the savings to hand, and would prefer not to work with an investor, it’s a good idea to consider a business loan. The process needn’t be as intimidating as you might imagine; in fact, Lend Genius will help you to find the start-up business loan that’s perfect for your circumstances.
Note that, like all loans, you will need to keep up with the agreed payment terms to avoid costly penalties.
Now that you have the funding ideas at hand, it’s time to get going with your business idea. Good luck!