Having a tech business idea is great, but unfortunately, there is always that one big hitch – funding. And you have to get it somehow, because otherwise, you won’t be able to hire the best people, achieve traction, and create life-changing products. However, it is not that easy to find it, especially for small businesses and startups. You have to look at all financing possibilities and find the best one. Some of these five options might be the answer to your current business needs.
Friends and family
This should be the first place to seek help when it comes to funding your startup. First of all, they will all be glad to help you if they can. If your startup idea is reasonable, of course. You won’t have any troubles with interest, as well as strict payment deadlines. You will, hopefully, have all the time in the world to build your startup and return that money later when you establish the business. However, don’t lie to them – inform them about all potential risks, and how exactly you are going to prevent them from happening, or how you are going to react if something unexpected occurs.
Personal business loans
These loans are a great way of funding, especially if you need a small amount of money to support and establish your startup project. However, depending on your needs, credit score, and business requirements, you can either choose secured or unsecured business loans. Secured loans require you to provide a guarantee that your loan will be repaid. On the other hand, financing with unsecured business loans doesn’t require capital to be placed against the amount borrowed. Therefore, it is an easier way to secure funds since you don’t have to risk your valuable personal assets. You will have to prepare appropriate documentation for each option you choose, depending on your business and country you live in.
Government programs, grants, and loans
Many people tend to overlook this funding option because they forget that the government also has an interest in financing talented individuals. In more economically developed countries, new businesses represent a substantial source of economic growth, and therefore, it is an easy decision for the government to offer convenient loans toyoung entrepreneurs. On top of that, science and tech startups are the ones that have an advantage and a solid chance to earn some funding. Research the situation in your country or city, and always look for options. If you have an excellent idea, great presentation, and realistic goals, you might be the one that receives a government loan.
Bootstrapping is slightlydifferent from the rest since it is not a classic form of funding. You are spending your own resources on building a product as quickly as possible to get it out on the market. Hence, you are not making the ideal version of it at first, because you need a lot of money and time for that. Instead, you use your current resources to build a version you can work with, and after that, you use any profit you earn to improve it. Other than profit, you should also listen to your audience’s feedback and use their first impressions to make a better second version. Bootstrapping is cheap, efficient, and a popular method among many startups.
Crowdfunding is another unique funding option. You’ve probably heard ofsome of the most popular crowdfunding platforms such as Kickstarter and Indiegogo. The way these platforms work is pretty simple. As a startup campaigner, you share your business plan, visions, goals, and objectives with a larger group of people. You want them to like it, and donate a few (or more) dollars to your project. Therefore, your presentation and marketing are essential, and they require a lot of effort. However, if many people like your idea, you will get your desired funds to spend on the goals you’ve presented. At the same time, you are creating a future customer base, which is another huge advantage.