Many of us are just tired of working in an office for someone and we all wish to start a business for ourselves. Starting a business enables you to be independent and you are your own boss. The first thing that you need to start your business is the plan. You need to have a business plan which can reap you profits after the implementation. To implement this plan, you need to have the funding. The amount of funding may vary according to your plan but the main thing is having the funding. If you have a plan and if you are just looking for money to implement the plan then let us tell you some of the ways to fund your business.
- Banks & Financial Institutes – The primary source of the funds is the bank. You can start by applying for a loan. If you have fixed deposits or securities then you can use them as a collateral and it will enable you to reduce the interest rate on the loan. The banks will remain to be the primary source of money. You can start with a small funding and scale your business as you make profits. The banks easily provide the business loans so do not ignore this aspect of the funding.
- Friends & Family – You can start by using your savings. If the savings are not enough, then you can also loan money from friends and family. You can offer them interest like you would have paid to the banks. If you are sure that the business will make profit then only you must reach out to friends and family. You can even offer partnership to the friend who offers to fund your plan so that you can be your own boss.
- Venture Capitalist & Angel Investor – The next option is the venture capitalists. If you are approaching the venture capitalist and understand that you will be able to get the money in return of equity shares. You might not have the complete autonomy when you are depending on the venture capitalists as the venture capitalist will also hold ownership in your company. Similarly, you can reach out to Angel Investors for the funding.
- Crowdfunding – If your plan is really innovative and if you think that your plan will take market by storm then you can go ahead and seek funding from the crowd. There are many crowdfunding portals available in the USA and you can exploit their capabilities. If you are getting crowdfunding then there are chances that you will be able to get a lot more investment than you actually need.
You can explore these ways out depending upon the amount of funding you need. You can also try various sources to get the required funding. Do not forget to account for the cost of debt as this will help you in evaluating the leverage you have. Moreover, accounting for the cost of debt will also enable you to get accurate numbers while calculating the profits. Each of these methods have their pros and cons so you must evaluate the details before going ahead with the final decision.