As you read about a startup that was getting financing, you may have thought about what it meant for you to say "enough with the bootstrap." The world can say that it is a daring dream. But in reality, is it feasible?
Citing Small Business Administration data in 2013, Forbes reported that there are approximately 600,000 small businesses established in the United States each year. In addition, 99.5% of entrepreneurs will not have venture capital at the very beginning.
Do not get bogged down in statistics. In the first place, your creativity and ingenuity are what allowed you to get started in business. Use them to keep you in the game and even accelerate the growth of your startup. Here are 7 examples to start:
1. Increase your credit score
One way to create a positive credit score is to borrow money from the bank. If this is not possible, try lending companies that target small and medium-sized businesses. Once your loan application is approved, be sure to repay the debt religiously.
It is important not to miss your due dates. But how do you do that? Borrow what you can afford, advises small business loans. At the same time, use funds on activities that will produce good returns. In this way, you will be able to grow your profits, pay your loans and increase your credit rating.
2. Try crowdfunding
This tactic has gained popularity because of individuals and organizations that raise money on the Internet for projects and causes. However, the business world has also been quick to catch up. There are crowdfunding platforms dedicated to meeting the needs of companies, such as Fundable.
Crowdfunding is different from investing because it does not involve the offering of securities. You will get help depending on the merits of your idea, technology, product or service. At the same time, this method allows you to test the marketability of your idea, technology, product or service.
3. Tap your networks
Peer-to-peer networks are an alternative source of financing. Expect that you would fall on someone who knows an investor or two. In this case, be prepared to introduce these investors when you meet them. Of course, there are also good old loans from friends and family willing. But treat them like banks with a strict debt repayment policy. Make sure you pay them on time to earn not only social points but also a good reputation for credit.
4. Hiring a quality team
At startup, you may be able to hire few people to handle development, administration, sales, and marketing. Depending on your cash flow, you can ship internal or independent employees. The most important thing here is that you select the best candidate for each position you want to fill. In technology, for example, your team will help you build and sell the prototype of your product. It is important that you all share the same respect for excellence in the workplace.
5. Software Offering as a Service (SaaS)
Another way to raise funds is to offer a Software-as-a-Service that follows the model of the subscription. Here, you will ask your customers to pay the initial cost before they can access your platform, technology or tool. This is how Airbnb is launched, according to TechCrunch . This is now a shining example of resourcefulness. By asking for a payment from the start, she was able to finance her operations and expansion.
6. Keep your day job
If you have not started at all, you might as well keep your day job until you have spared enough to continue your dream business. Some passionate but naive entrepreneurs leave their work full time without considering the consequences of their actions. The first few months of a commercial operation will already absorb most of your savings if you do not prepare well.
7. Apply for Government Loans and Grants
Last but not least, do not hesitate to apply for loans and government grants for small businesses. According to Kristopher Jones of LSEO.com, some of the entities you can contact are: Chambers of Commerce, Small Business Development Centers and Economic and Community Development Offices. Know the requirements they need. Above all, show them that you can create more jobs and that there is money, Jones adds.