10 Strategies for Obtaining Funding for Your Business
BUSINESS – Here are ten (10) effective ways to successfully raise capital for your growing business ventures.
How can you secure the initial funds for your business?
Many individuals aiming to start their businesses find this question to be a major hurdle. Frequently, friends and peers express concerns about the scarcity of funds preventing them from leaving their jobs to chase their entrepreneurial dreams.
While some strategies are straightforward, others demand a blend of ingenuity and careful research to succeed. If you’ve longed for the means to initiate your own business venture, here are ten strategies that might help you raise the necessary capital to embark on your entrepreneurial journey.
1.Your Own Savings
The most straightforward approach involves disciplined saving. Adopting a frugal lifestyle, living beneath your means, and prioritizing savings ensures that any business failure won’t result in significant financial burdens.
2. Liquidate Assets
Supplementing your savings, you can sell personal assets, as one of my father’s friends did, who sold their family car to establish a small photocopying center. Items such as gadgets, jewelry, furniture, or even investments can be considered for liquidation.
3. Work for Extra Income
Creating a secondary income stream through a part-time job or sideline endeavor is a swift means to accumulate capital. This method is particularly effective if your primary employment covers your basic financial requirements.
4. Take Out A Personal Loan
Leveraging your employment status and credit history, acquiring a personal loan from banks or credit card companies is a viable option. Government agencies and microfinance institutions also offer non-collateral personal loans based on a sound business plan.
5. Apply For a Bank Loan
Banks also provide substantial financial support for medium-scale business ventures, albeit with higher interest rates and collateral requirements. Several banks, such as Planters Development Bank, Bank of the Philippine Islands (BPI), Development Bank of the Philippines (DBP), and Land Bank of the Philippines, cater to small and medium enterprises.
6. Use Credit Cards
Credit cards can serve as a means to access capital, enabling cash advances or purchasing essential resources for your business. However, meticulous financial management is crucial to handle the associated interest charges effectively.
7. Check Rediscounting
Opting for check rediscounting allows you to acquire cash in exchange for post-dated checks, albeit at an interest cost. This method serves short-term cash flow requirements and smaller capital needs.
8. Borrow Money from Family and Friends
Borrowing from close contacts offers a flexible and often interest-free solution, but it requires careful communication, professionalism, and clear terms to maintain trust and manage expectations.
9. Form a Joint Venture
Instead of seeking individual investments, considering a joint venture with friends or acquaintances can combine resources and expertise, yet requires explicit agreements and delineation of responsibilities to prevent potential conflicts.
10. Seek a Venture Capitalist
Engaging venture capitalists or angel investors offers a chance for substantial investment, although it necessitates ceding partial ownership or paying royalty fees, alongside relinquishing some control over operational decisions.
Ultimately, regardless of the method chosen, a robust and comprehensive business plan remains pivotal. Not only does it reassure creditors, but it also serves as a blueprint for success and guides potential investors toward your vision.
