How Do You Raise Capital For Your Business?
Having an idea of what could possibly be a lucrative business, later on, is great. You get excited by anticipating a positive outcome. You also would like to see the progress of the business later on.
However, one big challenge you might face is determining where to get the capital for the startup. Whether the business will start small or start big immediately, you still need money.
So then, how can you raise capital for your business?
Bootstrap Your Business
This is perhaps the easiest way to raise capital for your business. You will consider your sources of funds and see whether you can launch your business idea with the steady stream of cash you have. Some are known to support their business until their business gets profitable. One advantage of this is that you do not have to worry about loans to pay.
Ask From Family and Friends
The next easy way to raise capital for your business is asking for monetary support from your family and friends. Be clear about your business plan, how you think your business idea will succeed, and what you think are the risks to your business success. They just might help you in the long run. Also, be clear if you are asking for a business loan from them, gift money, or money that is invested in your business.
Crowdfund Your Idea
Even if you have the means to fund your own business, you might consider the expansion of your business in the future. So, to get more money without having to apply for a loan, you can go crowdfunding. You will have to put up a detailed description of your business in the platform, mentioning the goals of your business, or plans for making a profit. Consumers can then read about your business and if they like the idea, they will give you money. Just be clear about the particulars so that potential consumers will give you money for it.
Apply for a Loan
Usually, loaning from microfinance or banks is where startups look into when it comes to borrowing money. You have to meet certain requirements like being in business for two or more years, being a good payer, and the business has strong annual revenue (i.e. at least USD 100, 000). This is a good way to raise capital for your business if you are looking for some USD 5, 000 to USD 500, 000 worth of capital.
Find an Angel Investor
Angel investors have surplus cash and are keen to invest in promising startups. They have also accredited individuals exceeding USD 1M in their reserve funds or may have an annual income of USD 200, 000. They operate alone or team up with other angel investors to form a fund.
Knowing that they have this potential for giving you the capital you need, you might opt to tap this resource. To find them, you might ask other entrepreneurs who might be using this resource, or you may look into a website helping entrepreneurs get connected with investors.
The above are just five of the many different ways you may raise capital for your business. There are more out there but these five are some of the safest yet effective ways to raise capital for your business.
At 3E Accounting, you will be landing a one-stop solution to all your start-up problems. We are a Hong Kong Incorporation Agency. Due to the stability of our economy and the decent business climate here, many investors find it appropriate to set up their businesses here.
Hong Kong is one of the most ideal places for funding your start-up business. You will find it easier to kick-start your business when you give us a try.