So, you have a great idea for a new company, but how are you planning to fund your startup business? Funding a business is not just about funding your products, there are a lot of angles like employing public relations manager to spread the news and build the name of your company to reach your target customers or clients. Remember, no one is as invested in your business idea as you are, so if you want people to open their wallets for you, then you need to show that they are getting something in return. This means you need a very good business plan backed up by strong market research.
If your business idea offers something truly new, then proving demand might be difficult. One way of funding a new business is to use crowd funding. This helps you in two ways. Firstly, you get the money you need to build on your business idea and secondly you get proof that there are consumers out there who like the idea of your product enough to give you money for it. Crowd funding gives off the wall ideas a chance to develop, and projects that get funded are more appealing to traditional investors.
If you go down the traditional investor route, then you need to be willing to give up some control of the company. Investors will usually want shares, and to have some decision making power – although silent partners do exist. It is more common for silent partnerships to happen when the person looking for funding has a good track record for running similar kinds of business. As a novice entrepreneur, you will find that many companies are unwilling to invest until they have seen that you are committed to growing your business in a sustainable way, and they know that you have your record keeping, business continuity and quality control all in place.
Do not fall into the trap of being too proud to bring in outside help. Remember that you are an expert in your field, and it is best for your business if you focus on that field. Everything else – the marketing, bookkeeping, law and customer relations, is important, but can be better handled by people that know those things well.
When you ask for money for your business idea, make sure you get enough to support it properly. It looks better to ask for enough in the first place than to come back asking for more a few months into the project because you got your figures wrong and were not able to get off the ground.