Finding financing in any economic climate can be challenging. It doesn’t matter if you’re looking for start-up funds, capital to expand or money to hold on through the tough times. But given our current state of affairs, securing funds is as tough as ever.
You’ve probably heard the saying,
“You’ve got to spend money to make money.”
And it’s true, at least if your intention is to make money through your own business.
When I decided I wanted to give up the path of working for someone else and start working for myself, I quickly realized that it would cost money to place ads online and get qualified prospects in front of my offers.
At the start, I didn’t have all the money needed.
However I was determined not to give up, and I found the ways to raise that money.
Maybe you’re in the same boat. That’s why I wanted to share with you, tips and ideas for financing a new business.
My 9 Ways to Finance Your Small Business
1. Get Out and Network
What I love about internet marketing is the ability to make sales without ever leaving my home, without anyone needing to know what I do, and without even needing to speak to customers myself.
I was never into the old-school model of network marketing where you try to sign up your friends and family.
But the upside of making sales face-to-face is it doesn’t cost you any money on advertising.
Sometimes, all you need to do is go along to a local business networking event, start up a conversation with the right person, and you could be making a sale before you know it.
Then, you can reinvest that money back into your online marketing…
2. Invest Your Pay from Your Day Job
You’re probably here reading this because you want to say goodbye to your job and start being your own boss.
So was I, when I started. So was my father. But we didn’t quit our jobs immediately.
We kept going, just for the sake of raising money for our business. This was done by cutting back on living expenses and put aside a set portion of my job income to go straight into the business.
I’ve even known people who have started part-time jobs AFTER they started their business, just for the sake of financing the business.
It may be longer hours to work, but it’s worth it in the long run.
3. Use a Credit Card
Using a credit card to fund your business is some serious risky business.
Fall behind on your payment and your credit score gets whacked. Pay just the minimum each month and you could create a hole you’ll never get out of.
However, used responsibly, a credit card can get you out of the occasional jam and even extend your accounts payable period to shore up your cash flow.
4. Attract an Angel Investor
When pitching an angel investor, all the old rules still apply: be succinct, avoid jargon, have an exit strategy. But the economic turmoil of the last few years has made a complicated game even trickier.
Which means you might need to have more than one investor.
5. Raise Money from Your Family and Friends
Hitting up family and friends is the most common way to finance a start-up. But when you turn loved ones into creditors, you’re risking their financial future and jeopardizing important personal relationships.
A classic mistake is approaching friends and family before a formal business plan is even in place. DO NOT do that!
6. Secure an SBA Loan
With banks reluctant to take any chances with their own money in the wake of the credit crisis, loans guaranteed by the U.S. Small Business Administration have become a hot commodity.
While SBA-backed loans are open to any small business, there are a number of qualifications– check them out here.
7. Tap into Your 401(k) / Superannuation
Those funds you’ve accumulated in your 401(k) (Superannuation in Australia) over the years can look pretty tempting if you’re unemployed and thinking about starting your own business. With provisions in the tax code, you actually can tap into them without penalty if you follow the right steps.
The steps are simple enough, but legally complex, so you’ll need someone with experience setting up a C corporation and the appropriate retirement plan to roll your retirement assets into.
Remember that you’re investing your retirement funds, which means if things don’t pan out, not only do you lose your business, but your nest egg, too.
8. Remember Your WHY
When you’re short on capital, it can be tempting to give up on your dreams of owning your own lifestyle business.
If you’re doing this to help your family, for example, that desire will ALWAYS outweigh the difficulty of finding money.
9. Start a Side Business to Finance your Main Business
Not all Online Marketing Businesses are equal.
For example, those who sell dinky little $2 books on Amazon Kindle.
The pro of that is it’s a low-cost business, and you can get started for very little capital. You can take the income you make from a business like that, and reinvest it into your main business.
But as for your main business, you want something far more robust.
But with the Turnkey Business System, you can make up to $20,000 from just a single customer!
All you have to do is place ads online to generate leads. Even if just one of your leads buys, you could potentially make a $20,000 commission.