One of the most difficult parts of starting a new business is figuring out where the funding will come from.
Most new business owners use funding from one of these sources:
- Personal savings
- Bank loan
- Friends and family
- Credit Cards
However, if you don’t want to use one of these funding sources, or you can’t use them, here are some alternatives.
Go Minimalist
Although there are many things that would be nice to have when you start your business, some are not completely necessary. Necessary expenses include things like permits, licenses, safety precautions, and filing fees.
Some business expenses are negotiable. These might include comparing prices on new business equipment or software that’s necessary for your business.
Some business expenses aren’t necessary at the beginning. Rather than splurging for a social media manager or sending out direct mail to the local area, consider cheaper marketing efforts such as posting to social media yourself or networking in your local community.
Start by making a list of your ideal start-up costs. Then take a note of which of these costs can be delayed for the time being until your business is making a profit. Last, consider which of your business expenses can be negotiated and evaluated for lower-cost alternatives.
Download the Free Business Toolkit for our free Startup Cost Template.
Find A Partner
Although many businesses begin as solo endeavours, you might want to explore the benefits of starting your business with a partner. When you team up with a colleague you not only double the manpower, you’ll also gain other benefits.
A partnership can mean having new products and services that you can bring to your target market. Or it can help you break into a new niche. Partners may also have referral networks that will help you grow your business.
Before you enter into a partnership make sure to thoroughly research your potential partner to make sure they’re a good fit. Make sure your partner has a good reputation, is able to commit to your partnership, and that you work together well.
Consider having an attorney create a partnership agreement that outlines terms and conditions before getting started. Or find templates online if you can’t afford an attorney to give yourself some basic protections before you jump in.
Apply For Grants
There are many grants available when starting a business. These can come from your local government, private groups, or the Australian government. Although the grant application process can be time-consuming and somewhat confusing, it’s well worth the effort if you get business funding.
Take your time doing your research. Understand the specific requirements for the grant your applying for. Then take your time completing and submitting your application so you have a higher likelihood of receiving the award.
Crowdfunding
Crowdfunding is when a business or individual asks the public for monetary support and donations to fund a project. Crowdfunding does not require repayment.
Oftentimes the business will offer the public perks such as discounts and free products to thank people for different levels of donation into the fund.
There are many ways to get started with crowdfunding. Websites such as Kickstarter are a great way to start.
Take note that crowdfunding is different from peer-to-peer lending or microloans, both of which require repayment. Although you may want to research and consider these options, they may not be ideal for all businesses.