You have a great idea, a strong agile team, and a great customer base. Now, your only challenge is growing your company in production, marketing, building your quality team, or expanding your product/service line. You realize that you need to fund this next chapter in your business somehow. Here are a few popular options that can help get your company funding; however, you should first analyze your financials.
Have a financial plan for your company. Make sure you know your target market and reflect how many people are in the market where you plan on doing your business. With that number, you will be able to make a realistic estimate of your yearly revenue and portray how you would like your company to grow. This will also give you a view of how you might want to use future funding and to predict the return you can give to the investors.
Now that you have a financial plan, it will make it easier to find funding and it will also help you keep track of where you are willing to spend money and where your company wants to spend money to help it grow.
Bootstrapping is a way to fund your own business by yourself. With bootstrapping, you can fund your business without external capital. You can take money from your saving, open up credit cards, use your personal equity, any money you possibly have on hand or items you possess that can be sold.
You won’t have any monthly payments with bootstrapping that you have to deal with — however, you will have to be micromanaging your funds to make sure they are being used efficiently.
Friends & Family:
Take into consideration your friends and family: they can be a great source of funding and help you get started on growing your business.
Make sure that before you go to your friends and family for funding, that you have a business plan to show them how their money will be used. In the case of getting money from those close to you, it is more of an investment in you rather than an investment that they will ever see again; you should make this clear to them before taking any money.
There are many sites out there that utilize the power of the internet and the mass amount of people on it: they can either donate their hard-earned money from the kindness of their hearts, or receive equity within the company being funded.
Both of the above mentioned are great options, and you can set a time period in which the funding needs to be completed. Crowdfunding is somewhat of a good idea in testing if your product is worth your time and effort.
When it comes to getting a lot of money quickly along with great insight, Angel investors, wealthy business savvy individuals, can do the trick. They provide sums of money from tens of thousands of dollars to a few million, and they look for a return period of 5–7 years; however, the real benefit of going with an angel investor is the connections they bring to the table and the doors that they can open for your business, along with experience.
There are many ways to get funding for your ideas: it is up to you and your team to figure out which option is the best for your company. As another tip, don’t forget your financial analysis so that right from the beginning you and your team are upfront with what you are looking to put the funding towards with investors. By making your intentions clear, there won’t be any confusion with what you are doing with the money and when said investors should get their money back.
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