What’s more important than growing your own business? Well, your life, but that’s beside the point here. When you decide to be your own boss, you cannot imagine how much your business will absorb your life. One of the most important things you must do from the get-go is fund your venture so it will begin to earn a profit quickly. You cannot worry about financing all the time, however, so use one of these ways to secure the cash you need and then get your company on the path to Fortune 500 status.
Angel Investment Groups
You may hear people call wealthy investors angels but the reason why isn’t because they live a virtuous life. Angel investors are those who put their money into startup and/or small business ventures. They see promise in the proposed business plan and are willing to foot the initial bills. This works well whether you seek out one angel investor or a group of them – many pool their resources into one group. The angel will give you money and ask for partial ownership in return. He or she may also want to manage part of your business. Don’t wrinkle your nose. The initial advice and management may prove invaluable to your business success and you can buy them out later.
Bootstrap Your Own Collateral
If you’re established in your existing career and have plenty of assets in your portfolio, it might be time to “bootstrap” them and use the cash toward your new business startup costs. The only problem with this plan is two-fold: you’re cashing out your assets and reducing your portfolio and you may need to replace or pay some assets back. For example, if you cash out your retirement savings to start your own business, you’ll need to replace it quickly. If you borrow against your existing mortgage or credit lines, you’ll need to pay those back. Asset bootstrapping is a common funding tool but the caveat is you must use it wisely, so come up with a solid replenishment plan.
Let the Government Help
Local, state, and the federal governments all understand that business boosts economies. As such, each is vested in the success of its citizens. Many local and state governments offer incentives to those who wish to open a business in their area, and the federal government has numerous funding programs, as well. Your best bet is to secure a grant because you don’t have to pay the money back. This is a financial gift, if you will, from the government designed to help you with specific expenses. Grants aren’t limited to special circumstances, such as minority, veteran, and women-owned businesses, but if you’re one of those, it will help. Research all funding options to see if you can get some cash from the government.
Build Your Venture With Venture Capital
Venture capitalists make their money by investing in business. Peter Foyo, for example, is a well-known venture capitalist who invests in U.S. real estate. You might think that venture capital is only for established businesses but this isn’t necessarily the case. Yes, most VCs as they’re called look to grow an existing entity rather than invest in a new one, but some will help get your feet off the ground if they believe in your vision. The best thing about a VC is he or she will sit down with you and come up with your business growth plan, and these investors are experts in their field. They know how to grow business, so working with one could prove beneficial toward your goals.
Once you’ve secured the funding you need to start your business, get going. If you don’t have to worry about finances, you can focus on operations and growth. Soon, you’ll be that angel investor or VC to some other startup.