6 Ways To Finance A New Business Without Breaking The Bank
Getting into the business world is not an easy task if you are not planning to break the bank. Financing is one of the most critical aspects required for getting the business through its starting stage. However, if you have an excellent and unique idea in mind that you are confident won’t fail and will get you amidst the big players, then you have a good chance that these alternative financing ways will do your business good.
#1: Share Your Business Idea with Friends & Relatives
If you are looking forward to financing help from friends and relatives, be prepared for projecting the idea in a professional manner. You should have a business plan ready and share the ins and outs of the business idea and why you believe it would make a difference. Also, talk clearly about the loan you are planning to take and the interest at which you are willing to pay it back.
#2: Get into Business with a Big Business Company
One of the best ways to enter into the business world is to license the idea you have in mind with the help of an attorney and pitch it to big business players who might be interested to take the leap. The way it works is that the big business firm will take care of the manufacture/development, promotion and sales while you will be handed over a percentage of the sales profits. Make sure that you have a proper licensing in place with detailed non-disclosure agreements so that you are not cheated by your idea being copied in any way.
#3: Individual Loans
This type of loan is termed as individual lending as there is no financial institution involved. This can be done through governing sites like Prosper.com and similar sites where individual people are willing to give loans on a reduced rate of interest as compared to banks. These loans are issued for both personal and business investments which makes it a good choice for obtaining lesser interest rates.
This concept, though appears similar to individual loans, is actually a little different. The concept is that you pitch your business product idea and you can collect funds from a number of individuals who are interested in the idea. Now, these individuals may not want the money back with interest but rather would like to be early users of the product or may demand some special treatment. It is easier to get crowdfunding opportunities when the business idea is intriguing and new and people are excited to try it out.
#5: Subscription Sales
This is one of the best ways to establish a controlled flow of income which can help in better assessment of revenue and expenditures. Rather than putting up a one-time sales order, try to sell a subscription which will ensure that you get a certain amount on a monthly basis and manage that for your business activities accordingly.
#6: Purchase Order
Think big. If you are able to sell your idea to a business firm that is interested in your product/service and agrees to place a purchase order with initial financing, this can help you get enough funds to get started without having to break the bank or worrying about paying back heavy loans with interest.