Article Tags : angel investor . business . business capital . capital raising . investors . Money . money raising . raise capital . Small business
Starting a business is a stressful, time-consuming endeavor. The research and planning alone can take weeks, months, or even years. However, one of the most commonly asked questions in regards to starting a business is how to raise the initial capital needed in order to launch. Most businesses start with primary funding supplied by the business owner, although many still need additional capital to get through the first two years or so, until the business starts to make a profit. The following ways to raise capital for a start up should help give a potential new business owner a place to begin.
Step 1. Start with personal assets like savings or investments.
The more money you can supply to the business on your own, the lower your debt. The fewer liabilities on a new, fledgling business the better. Personal funds invested in the business can be withdrawn later. You can use assets such as personal savings, stocks, or investments. You can also contribute to the business by “selling” equipment or assets you already own to the business.
Step 2. Consider taking on a partner.
Not only can a partner supply additional capital needed, but also can spread the wokload out in terms of business responsibilities. However, be sure the partner you choose is a good fit for you and your business.
Step 3. Look for investors.
There are angel investors and other individuals who look for solid business start up concepts in which to invest their money. These investors may or may not want a say in daily operations, depending on the level of their investment and their tolerance for risk. However, most investors expect some kind of return on their investment at some point in the future.
Step 4. Take out a private loan.
For some individuals, a private loan from family members, friends, or business associates provides the needed capital to launch their business idea.
Step 5. Take out a bank loan.
Banks and financial institutions are the traditional source of business startup capital.
Apply for grants. Many government and private agencies provide grants for certain types of business start-ups, or for business owners who meet certain criteria. Grants do not have to be repaid. Creative funding options are available. Talk to other business owners in your industry or complimentary industries. Many businesses and corporations have scholarships, sponsorships, and other programs which can help raise capital for a start up business.
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