If you are in the planning stages of a new business venture then you will be all too aware of the importance of raising funds to turn your business vision into a profitable reality. Very few businesses are able to go it alone and become successful on the back of only their own funding, most business owners know that to make the next step or even to have a fighting chance they will need outside investment at some stage. So what options are available for a startup looking for funding in 2016?
There’s no doubt that the most attractive form of funding for any business is a grant as it’s basically a business loan that you don’t have to pay back. Sounds good right? It is if you can get one but qualifying for a grant is not an easy process.
To qualify for a grant your business will usually have to be developing a new piece of technology in a particular field, aim to export to other countries around the world or be willing to hire certain individuals and groups. Even if your business does meet these requirements you might find that there are other more detailed requirements to be met as well but grants are free to apply for so if you believe you meet the criteria it’s definitely worth applying for.
Over recent years crowdfunding has become increasingly popular amongst start-ups as a way of raising funds and gaining exposure for their brand at the same time. Crowdfunding is capital raised by members of the public who believe in your business and want to see it succeed. These investors aren’t funding your business for financial returns although most crowdfund projects give a reward/voucher/gift of some kind to each investor.
There are lots of platforms such as Kickstarter and Crowdcube through which you can promote your vision and appeal for investment. The catch on most of these platforms is that you will need to raise 100% of the finance that you are asking for otherwise you don’t get a penny so it’s an all or nothing venture. To be successful in crowdfunding you need to stand out from the crowd, offer great incentives for investors and take the time to put a really good pitch video together.
Keep an eye out for funding competitions that you can enter to raise funds for your start-up. This may sound like a shot in the dark and in some respect it is but there are business plan contests out there where the winner can win some real investment and if you believe in your business plan then why not submit it for their consideration.
Online lenders are a growing alternative to traditional bank loans as they have the advantage of speed on their side and in this fast paced modern business world speed is vital. For a lot of online lenders such as OnDeck an application takes around an hour and you will have a decision back from them in a couple of days. For modern business owners, especially those focused on e-commerce dealing with your funding online is very attractive so this is definitely an industry that looks set to grow even further over the next few years.
No matter what industry your startup is operating in there will be a funding option available to you. In order to successfully secure investment you will have to put the time and effort into presenting your business plan as well as possible and just as importantly you will need to do your research into which form of funding is best suited to your business.
Author Bio: Contributed by Stuart Cooke the Marketing Manager for Mapit, an online learning resource for accountancy professionals.