How To Source Money For Startups Or Businesses

HOW TO SOURCE FOR FUNDS FOR START UP BUSINESSES  

 

             Getting money to finance business ideas is one hell of a task. This is the level at which most entrepreneurs have problems. The problem of a lot of people is however not how to start a business, or getting the business idea, but how to finance that idea. One of the greatest challenges every startup businessman or entrepreneur faces, is the problem of financing a business or raising capital to start a business.

         
           There is no magic in getting money for your startup. It has to be sourced! Because there is hardly anyone who will just dash you money just because you have a good business idea. Even though it is very difficult, there are some strategic ways you can get the required amount of money for your business.

There is nothing that should stop you from reaching your goal when you are determined for success. There is hardly no successful business today that didn’t have the problem of getting capital for the business. So, get up and check the following options on how you can get money for your startups.

1.        Get a partner:        Getting a partner for your business will help to provide money for your start ups. In this case, you have the idea while your partner has the funds. You both can go into partnership based on the agreement between the two parties, especially on how the profits of the business will be shared. In this kind of situation, terms and condition must be clearly stated. So think about that person or people who have the money and can support your idea. Get to meet them and discuss with them.

2.      Crowdfunding:       Crowdfunding is the act of seeking funds for a project, business or venture through donators or contributors via the internet. As the name implies, the crowd donates money for your business. This can also be very effective especially in this age that the internet is very prominent.

3.        Friends and Family:          This is the primary source of funds for businesses at the early stage. Most startups get their capital from their relatives by showing them their idea. These people could be colleagues, parents, uncles, aunties, cousins, mentors, leader e.t.c. If your friends and family do not believe in you, it is very unlikely for outsiders to believe in you.

4.      Micro finance banks:       This is one of the common ways of sourcing for funds for startups. Micro finance banks provide loans for people who want to start both small and medium scale enterprises. Micro finance banks hardly collect collateral and they can give loans up to 5 million naira depending on the strength of your business. They also have low interest rates. Seize this opportunity and get that dream business started.

5.  Bank loans: This is one of the most popular sources of funds for startups in Nigeria. Even though it is very effective, it can also be difficult because it requires so many documentation and collateral before loans can be granted.

6.     Credit:   To fund your startup, you can also get credit facility from your distributor to get goods at large quantities and pay at a later time. This although applies only to businesses that involve sales of products.

7.     Cooperative and thrift societies:     You can also get capital to start your business through cooperative societies and associations who can offer loans in form of overdraft, soft loans and low interest loans.    

8.     Personal Funds:     This is also known as bootstrapping is a way by which an individual finances his own business by himself. Over 90% of startups are self-funded. This is the most reliable and most effective way of funding businesses. Although, it may take a bit longer to save money before you start your business, but the advantage is that you don’t have to give up any equity or control. Your business is your own!

Do not let anything, even funds; cost you that valuable business idea. With these many options available, there is no excuse for not living your dream. Your dream business is possible!