Are you looking to start your own business? While the initial stage may be exciting when starting out on a journey like this, it is often the most challenging period for a small business owner. Not only are you tasked with creating the system or systems in order to increase later efficiency, you are also forced to come up with the funds to run the business.
Every business needs money – it’s just a matter of how you are going to acquire the money.
With the increase in capitalism, there are now more ways to fund a business. You could go to a bank that issues small loans for a business loan, or you could go an alternative route.
Peer to Peer Lending – Depending on your credit score and history, you could get a decent rate to fund your new business. While I don’t have any experience with P2P lending as a borrower, many of my friends serve as investors. It is a growing area and has lot of potential going forward.
Friends and Family – If the business is as good of an idea as you think, why not ask friends and family to invest? This may feel uncomfortable for some people, but many family members want to support those they care about. Just make sure that you are willing to do whatever it takes to pay it back.
Outside Investors – Another route would be to offer a portion of the business ownership to outside investors. You may be interested in creating a limited partnership, where you, the general partner, make all the decisions and the limited partners invest in the business idea. You can offer them dividends according to the number of shares or just a percentage of the value of the company. Make sure to do your homework before doing this option however.
The important thing to consider is that there are tons of opportunities for small business owners. It may take a lot of work to find funding, but it has a lot of potential and could be your ticket to financial security. Make sure to weigh the risk with the benefits and if you decide to go for it, don’t take “no” for an answer.