Many business owners start their companies on the side and then grow them over time. They can do this cheaply or for free, and they slowly put assets back into the company as it grows.
However, this doesn’t work in all cases. If you’re starting a restaurant, for instance, you need a building, equipment, tables, money for renovations, a staff and much more. You’re not running it out of your garage until it’s financially viable. It only works if you have the money up front. How do you get this funding?
Are you eligible for a grant?
Depending on the type of business you’re starting, there may be government grants available. For instance, many refugee resettlement agencies that work with the government — but that are run by outside businesses — will get government grants. While grants are competitive, they can provide a real boost if you qualify.
Can you find an investor?
Another option is simply to sell a share of the business at the beginning by bringing on an investor. They provide the capital to start the company, and you reward that with an ownership percentage. They’re gambling that the business will flourish and they’ll make their money back many times over.
Should you just apply for a loan?
You can also apply for small business loans. You’ll need to show your business plan and your financial projections to the lender. If they approve it, you also get terms for how to pay the loan off over time, just as you would with a car or a home. You don’t lose any ownership this way, but you pay back more than you borrowed.
Could you crowdfund it?
If you have a product but you can’t afford to produce and stock it, one option is to crowdfund it. People commit money through an online platform and you promise them products once they’re made. You use their money to produce what you need and it jumpstarts your company.
No matter what option you choose, it’s very important to do everything right. You must know what legal steps to take, what options you have and how to position your business to succeed.
