Ways & How

how to get funding to start a business

how to get funding to start a business

Starting up a business primarily involves money, and how to get funding to start a business is the biggest problem many startups face. For those who have sufficient capital, putting up a business isn’t a big issue. But for those who have none, finding sources of funds can be challenging. Part of the process is to conceptualize a great business plan so that creditors and lending institutions believe that your business is capable of growing and meeting its goals and that you have the ability to pay your debt. Convincing creditors of the viability of your plan takes some guts and you have to sell it to them, so to speak. Creditors take risks in lending out money, so they get skittish or turned off if your business proposal looks impossible or impractical. To avoid this, use the following simple steps to get funding to start a business.

  1. Have a good feasibility study. By having a feasibility study, you have something off of which to build a practical business plan that has the potential to be successful. The feasibility study allows you to visualize the possible potential growth of your business, its downsides and the backup plans for times of crisis.

    The keyword is to be prepared for any eventualities, favorable or not.

  2. Have a business plan. With the feasibility study in place, you can proceed in making a business plan. The plan must be meticulously prepared. It must reflect the details shown in the feasibility study. It must be simple. With a good business plan, creditors and lending institutions will put their trust in you and invest their money in your business.

  3. Determine the source of your funds. Based on your business plan, you’ll have a clue on how much money you need. Then you can start searching for lending institutions or individuals who have the financial capability to start up your business.

  4. Sell your business plan. Selling business plan doesn’t literally mean to trade it for money. It simply means attracting those people who have the financial capability to fuel your business and making them believe that your business is a good venture.

  5. Be aggressive and optimistic. In convincing your creditors and lenders, you must be aggressive in telling them that your business proposal brings something new to the market and that your target customers would be delighted with your products and services. Be optimistic about the business and convince them that you can make it work.

  6. Widen your search for possible business investors. In searching for investors and financiers, don’t limit yourself locally. Expand your search by using the Internet and all other media of communication that can spread the news about your business proposal. Even your family and friends can be your business partners. There’s nothing wrong you trying to make them your trusted business associates.

  7. Be frugal, simple and save your money. If you want creditors and lending institutions to believe in your business proposal, you must show to them your fiscal responsibility. This is very important especially for those who are about to start a business. The creditors must be convinced that you have the resolve necessary to make sacrifices to pay your obligations. Save your hard-earned money because this can be your source of funding too.

These seven steps on how to get funding to start a business have been proven effective for many businesspeople. Be bold and be optimistic. Get the credit you need for your business and build your income higher and higher.


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