Are you planning to start your first company? Is “finance” the only blocking factor for your venture? In any economic condition, managing funds can be a tough process. This is one of the biggest challenges entrepreneurs face. However, there are few smart ways of funding your company, even during the toughest hour.
In this short post, you will read about strategies that can be used to fund your budding company.
If you are new to funding and managing a business, you should consider factoring.
By definition, factoring is a process where businesses sell their receivables at a low price. This helps the business put together some money. The money can be used to improve the business and keep it going.
Though factoring is effective, it is an expensive way of raising money. The receivables sold during the process would have made a profit at some point in time. This means factoring reduces your chances of making a big income. Nevertheless, many companies engage in factoring activities when they want to survive the situation and emerge more competitive.
#2 Bank Loan
Undeniably, approach a bank and requesting for a loan would be the smoothest way of funding your business. However, this technique may not work at all times. Banks are always careful about who gets their loans. If your credit report does not glow, the chances of you getting a bank loan are less.
Nevertheless, there is no harm in applying for a loan when you want to fund your business.
#3 Use Credit Cards
A lot of people are unaware of this funding strategy. Do you restrict your credit cards to personal use? Well, sometimes you should think again and use the cards in your business. Relying on credit cards to promote your business activities is a risky move. When you fail to repay the card on time, you will be pushed into a worse situation.
To save yourself from more complications, you must repay the credit card (at least a minimum amount) by the end of the month.
Last but certainly not least, you must try crowdfunding.
By definition, crowdfunding is the process of raising money with a creative idea. This method works if your business has very low operational costs. The ultimate aim of crowdfunding should be to collect 1000 to 2000 USD in 30 days. To make the most of this strategy, you should reach out to thousands and thousands of people.