It’s an excellent time to become an entrepreneur and start up your own company, but that doesn’t mean you’re guaranteed success if you foray into the market. Only those dedicated entrepreneurs with carefully construed business plans will succeed, which is why it’s imperative to do your homework and ensure that your company will have enough funds to take off in a competitive marketplace.
Here’s an analysis of 3 ways to raise startup money, why they’re so excellent for this day and age, and how to go about exploiting these techniques to ensure your startup soars from the very get-go.
1. Consider crowdfunding
Crowdfunding platforms like Kickstarter have become tremendously huge for one good reason – they produce results. Businesses which don’t consider crowdfunding, or the ability to tap into the monetary power of a mass audience by harnessing digital tools and platforms, are missing out on a serious opportunity to earn some nice cash for themselves. Modern consumers are familiar with crowdfunding platforms and are desperate to fund those content creators they love and trust. If you can win over the approval of the internet, you can harness the power of popular crowdfunding websites to ensure your startup has all the money it needs to take off smoothly.
You should review the pros and cons of crowdfunding before you go any further. This is because crowdfunding is excellent for some entrepreneurs but not necessarily the best option for others; those inventors with a unique and helpful gadget can easily find the R&D funds they need on Kickstarter, for instance, but more fleshed out business plans may be better suited for a lender’s office than a social media platform.
For those with serious ambitions, securing a business loan is by far the best bet for getting the startup funding you need to disrupt the marketplace.
2. Securing a business loan
Securing a business loan will ensure that you have the money you need to get your doors open while also opening up future lines of credit for your company. If you take out a business loan to get started and pay it back after your initial success, for instance, you’ll have proved the creditworthiness of your business and lenders everywhere will be willing to give you even more than before. In order to achieve those future goals, though, you should focus on securing your first and most important loan – that which will ensure your startup becomes a serious company with financial heft behind it.
Begin by reviewing the seven key steps towards getting a business loan. You should understand from the start that this is a time-consuming and careful process which demands your full attention. That’s because creditors won’t just take you at your word, but need a demonstration to understand why your business idea is worth investing in. The difference between a good and bad pitch could be what determines the fate of your startup. Know that your own personal credit history can be leveraged to help secure your business loan, so your personal example and past behavior will be important elements of your commercial success. When you understand this, you can browse a list of lenders with greater confidence in your chances of attaining a loan.
Sometimes, securing a business loan simply isn’t an option. In those cases, consider…
3. Release a purchasable beta
For those entrepreneurs in desperate need of money, you’ll need to find a good client with cash as quickly as possible. That means releasing a purchasable beta, a literal sample of your services to illustrate your potential. By releasing an invite-only beta that clients yearn to gain access to, you can convince them to pay you for access to an early version of your product so that you can refine it and ensure later versions are more monetizable.
This is an increasingly popular tactic in the modern marketplace, but understand that your success will hinge on whether you’re capable of generating an enticing beta that draws in potential clients. If you fail to generate a buzz for your product or service, your beta could be a failure and you’ll have to rely on other, more traditional means of raising money for your startup. With confidence, however, a successful beta launch can fund your coffers and ensure that your startup has all the financial security it needs to cross the finish line.