Pre-business and post-business file funding are completely different. When you have no business, how can you get funding? This is what we say pre-business funding, and when you start your business and your business is in growth, this is what we say post-business funding. Even if you have business and the business is not growing, you need to get funding using the methods used in pre-business finance.
When I was working as an employee during that time, I was thinking that I would save enough money so that I could start a business, and then I would leave my job and start the business using that money. But reality is very different. In reality, I was not able to save enough money to start a business. I was gaining debt instead. I was trying to start business without any money, and I failed because I don’t have knowledge about fundraising for business.
“We don’t have all the answers before starting the journey, but we get answers during the journey.”
If you want to start your business, the very first thing you need to know is how much money you need and Second thing which you need is your complete business plan. Without these things, you cannot pitch funding to anyone because it will be vague, and people will not have any interest in it.So please be patient until you create a complete business plan and you know how much funding you need.
Your Personal Savings
You can use your own money to start your business, but it is not recommend it because it is your own money, your own savings, and you can use it anytime, so please keep this money as backup so that in case you need money for your business in the future, you can use this. The second thing, which is very essential, is that if you can use other people’s money, you can start business any number of times, and if you use your own money, then opportunities will be limited. Or you may say that if you can start your business without investing any money from your pocket, then opportunities will not be limited. The third thing is that you must know that every time you raise funds, you will become smarter, as it is a high requirement to start business with other people money and keep your savings with you.
Parents
You can ask for money to start your business from your parents because the only thing that they want is your success, so you have pressure to create the business, but you will not have any other pressure if they support you. Definitely they will support you if they have enough money, but if you belong to a lower-income family, then it may not work for you, but if your parents have enough money or enough income, then they will definitely support you. There are many entrepreneurs and business owners who get initial funding to start the business from their parents, so you must approach them first.
Brother and Sister
You can ask for money to start your business from your elder brother and sister as well. Chances are less that they have surplus money to help you to start your business, but still, you can ask your brother and sister or your brother or sister for money to start your business if you have good relationship with them.
Close Friends
You can ask for money from your close friends to start your business. They may or may not be able to help you, but if you don’t tell them, then how will they know that you need money to start your own business? If you ask them, they may help you. If you don’t tell them, then they will definitely not help you because it will not come to their knowledge automatically that you want to start your own business.
Rich Relatives
Rich relatives can also provide you money to start your own business, and because they are rich, it means maybe they are business owners and they have good understanding about money and business, so you may approach them to get funding to start your own business. Please do not think that you are biased towards the relatives who have good money and that you are ignoring those who don’t have money. Those who don’t have money cannot give you money, so it will be a waste of your time and effort to approach them.
*Please remember if you take money from your parents, brother, sister, close friends, or rich relatives, then they may give you money as help, and they may tell you to return the principal only; they may help you with a very low rate of interest; they may tell you to pay it back when you can; they may give you money to start your business in exchange for equity in your business; and of course it will be invaluable help, or you will get priceless help if it is available to you, and it will help you to establish your business with less or no pressure. Please never try to make a fool of anyone nor break any ethics.
Crowdfunding
Crowdfunding is a comparatively new concept in today’s funding for your business. It is helpful in many other things as well, so you can raise money for your business using crowdfunding as well. crowdfunding Basically, you are asking for the small amount of money from people to start your business. If everyone pays you a small amount of money, then you will have enough money to start your own business. Many times people launch their product using crowdfunding; they give their first product or service to the people who are giving them contributions to start their business. In this way, your business gets advertisement free of cost, and you can successfully validate that your product or service is a good minimum viable product.
Selling Property
You can sell any property like gold, silver, land, etc., to get funds to start your own business, so you can find out any such property that you have but is not useful and sell that property to start your own business.
So it is recommend to you that if possible, you sell any property so that you can get surplus money so that you can start your business, and if you need more money in the coming days, you can do so very easily. But please remember you need to sell only that thing from which you are not getting any benefit, which is not useful for you but still you own it right now.
Supporters
There are some people who are your supporters, and you will find that supporters are the people in your family, your friends, your relatives, your close friends, etc. They are your supporters; they care about you. They care about what you do. They support you on your terms and conditions. They don’t bother about the business idea you have; they bother about you. They want to see you be a successful person in your own life, so these people will help you to start your business.
After starting the business, you will create more supporters of your business who will buy your product and service to support you, but as of now, your business is not in existence, so you don’t have that type of supporter right now.
Bank Loan:If you have a complete business plan and the plan is very good, then banks may provide you loan under any government scheme to start your own business. Banks may provide you loan to start your business under any scheme of the bank. You need to visit multiple banks to find out the opportunity to get funding to start your own business. Banks are also looking for good opportunities to provide loans so that they can get their loan repayment with interest. If they don’t do so, then they will be out of business soon.
Credit Card:Credit cards can also help you to start your business support. If you have two or three credit cards with good limit, then you can use the credit of your credit card, or you can transfer the credit from your credit card to your bank account, and then you can use it in your business, so it is also a way to find and get funds to start your business, but this is really very risky, so do it if and only if you are confident that your business will succeed. Please also remember that it is a credit card; it is not a debit card, so do not take out cash using your credit card because in this case you may have to pay a heavy penalty.
Credit: If you have good credit in the market, then you can get all the work done on most of the things that you know you need on credit, and when your business succeeds, you will pay them their payments. This is also a good way to start your business, but it is also risky, so implement this method if and only if you are confident that your business will succeed.
Now you’ve got the funding and started your business. If your business becomes profitable and cash flow gets positive, then it’s ok. If your business is still at loss then you need to find out now how much time your type of business takes to become profitable or what changes you can make to your business so that it itself becomes profitable. If your business is not going to be profitable, then you have to close the business. In case your business can become profitable after some changes or after sometime then you need to use pre-business finance to get more funding if you need it.In case your business becomes profitable, then you need to get funding to grow your business so you have more options to get funding because if a business is growing, then the business will get funding very easily. This is what I say post-Business Finance.
In post-business finance, you will raise funds to grow your business from a small business to a big business, and whatever you did from starting your business till now will decide whether your business can transform into a big business or not.
Post Business Finance
Enough revenue: If your business has surplus revenue, which you can use to grow your business from a small business to a big business, then it will be a win-win situation for you because, basically, you are earning from your customers, which is your bread and butter. You can grow your business without any pressure or any external funding; you will have ultimate control over your business.
Cost cutting: In business, if you can reduce your costs, then you will have more money to invest in the growth of your business, so if you can reduce your costs in a creative way, well, it will help you to grow your business. Reducing the cost is a very creative way to grow your business. Please remember that increasing the income takes time, but creative cost-cutting does not take much time, so it is an easier way to have more cash in your business. In fact, if you do not need post-business finance until after completing any project, you need to reduce your costs in the project.
Bank Loans : If the above two methods are not helpful for you, then you can apply for loan from banks. It may be a business loan , loan against property, or refinance of any present loan. Using one of three kinds of loans, you can get funding to transform your business from a small business to a big business. But the real question is why? Why shall you get loan from any bank? The answer is very simple: the cost of the fund from a bank is the least in the market; hence, we are up for loan from the bank so that the cost of the fund shall be as low as possible.
Trade Credit :You are working with some companies or some suppliers or some vendors, and till now your repayment is good, and you have created trust in your relationship with them, so now you can ask for trade credit, and if they provide you trade credit, then it will help you to grow your business without huge funding because you will take whatever product or service you need from them on credit, and when you earn from their product or service, from that earning you will repay them, so in this way in your business relationship you can use trade credit to grow your business.
Angel Investor : Angel investors are investors who invest in early startups. They don’t act as a fund; they invest individually to start up, and some angel investors provide mentorship as well because they are also business owners, and they have good experience in business. They invest the profit of their business in other businesses that will give you funding, but some will not respond to your phone call or email. If your business is a private limited or public limited, then you can approach angel investors for funding, but before approaching any angel investor, you must confirm that he or she is an active investor. Otherwise, there are many angel investors who will meet you and show off that they are big personalities, they know many big personalities, and they have multiple companies. This type of person will only waste your time, and they will not invest. So you need to confirm that in the previous one or two years, they have invested in some startup and they are active investors. Please remember that they are not doing any favor for you; you are taking funding from them to build the next great company, and they are investing to multiply their money five times, ten times, or twenty times, so it’s not personal. No investor can harass you in anyway just because they are investing money in your business, so it’s not personal; it’s completely professional. Once more, please remember they will invest in your business only for growth or customer service, nothing else.
Micro Venture Capitalist : Micro VCs are also similar to angel investors, but they work as a fund, not as an individual angel investor. Micro VCs are formed by creating a group of angel investors, and every micro VC fund has its own ticket size to join as an investor. They fill the gap between angel investors and venture capitalists. So if your business is in profit and its cash flow is positive, and your business is private limited or public limited, then you can approach mVC to get funding. No matter if you get funding from an angel investor or not, you can approach mVC to get funding for the growth of your business. Please remember that it’s not personal. They are not doing any favor to you by investing their money. You are asking for funds to create the next great company, and they are investing to multiply their money, so it’s nothing personal. They are not doing any favor to you or your business.
Venture Capitalist :If your business is ready to scale and transform from a small business to a big business, then only you can approach venture capitalists. They do not invest in small ticket sizes, or what you may say are small amounts of money; they invest large amounts of money in a small number of companies, and they invest only in those companies that can become giant companies. They also behave as a fund; they do not invest individually. They have good experience in scaling businesses, and they can help you a lot during the stale case. Their objective is to play big game, but please remember only one out of 1000 companies that get investment from an angel investor gets funding from a venture capitalist firm.
Getting funding from any investor is a time-consuming process, so please remember that one person on your team has to invest full time to get funding from the investors. It consists of a series of meetings, and if investors agree to invest in your business, then you will do paperwork after getting the funds in your business account. Before that, do not do any paperwork. Because this is a time-consuming process, and it is not guaranteed that an investor will invest in your business, that’s why many people focus on generating enough revenue instead of approaching investors. Please also remember that they are not giving you money for your personal expenses; they are giving you money to invest in your business, so it is not your personal benefit; it is the benefit of your business. Having money is a competitive advantage, that’s all.
Some people think that if they have money, their business will succeed, but this is not the reality. Even if you get funding from investors, it does not mean that your business will succeed; it may or may not succeed. One surprising fact that you must know is that most of the businesses do not fail because of lack of money; however, investors, business owners, and entrepreneurs have a phobia that the business will not survive if the business does not have enough money, but most of the time it does happen because of other reasons, not because of lack of money.
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