Startup Funding Tips for the Aspiring Female Entrepreneur
Starting your own business is exciting and could be your pathway towards a financially stable future for you and your family.
However, it can also be intimidating and stressful. Without proper guidance, assistance, and preparation, you’re bound to encounter problems. But just because there will be difficulties doesn’t mean you shouldn’t go for it!
Speaking of difficulties, one of the biggest challenges of starting your own business is securing funding. You need to have a full understanding of what you need to get your business up and running at least long enough to secure the needed funds to keep it going. You’ll also need to develop a plan to promote your business and attract more attention.
Fortunately, for today’s aspiring businesswomen, there are ways to secure the necessary funding for starting your business. Here we discuss several of them as well as key advice if you want to take these business funding routes.
Crowdfunding lets you get smaller investments or contributions from a larger group of investors or people. It’s now also easier, thanks to online tools that let you do it digitally in front of a wide range of people online. This technique has very few restrictions and, if many answer your call, is a great way to start off funding for your venture. Crowdfunding is an alternative for those who may not qualify for a loan and aren’t ready to seek angel funding or business partnerships.
If you’re planning to use crowdfunding, check out platforms such as Kickstarter which has launched over 370 000 projects and currently yields a 36-percent success rate. However, please take note that the Kickstarter funding concept is an all-or-nothing model. If you meet or exceed the goal you set, you keep the money. If you don’t, supporters or those who pledged don’t have to pay.
If you’ve begun to see some growth in your new business after investing your own money, it could be time to approach angel investors. Angel investors provide capital for startups, typically in exchange for convertible debt or ownership equity.
If you’re planning to meet with angel investors, be sure to have your business plan and numbers ready for their analysis and assessment. Don’t forget to emphasise how your business is going to succeed. At this point, it’s about the numbers and potential. Angel investors have to be sure they’ll make their money back. Be ready to tell them exactly how that is going to happen.
Depending on your credit and assets (for collateral), you can apply for a bank loan to raise funds for your business. To receive a loan specific to your new business, you’ll need to provide details on the health and growth of your business. Engage with the bank at the beginning stages of the enterprise by creating a merchant account, credit card, or checking account. The bank then gets the chance to see you as a customer and understand your business at all stages.
Remember that banks don’t just give out loans without proper analysis. They want to make sure you’ll be able to pay back your loan. As with other kinds of loans, it’s wise to have a good credit rating as it makes you more attractive in the eyes of banks and lenders.
While the government may not offer funds specific to starting a business, there are certain grants to consider. You can search for grants to fund specific business activities such as research and development, innovation, hiring employees, bringing your idea to the market, expansion, and marketing.
You can search online for organisations which offer grants that fit your needs. For example, the Department of Industry, Innovation, and Science lets you search for grants and assistance under different categories, from buying equipment to importing and exporting goods. However, chances are there are many others that might apply for the grant you want. This means you must be prepared in terms of the needed documents. You must also think of ways to be more convincing in your business reasons to increase your chances of securing the grant.
If your planned business is a small company that will be part of your local community, you may be able to connect with local Small Business support groups. There are many groups throughout the country that can help you get your business going financially.
These groups usually offer the opportunity to connect with successful business owners who might be willing to help aspiring entrepreneurs in terms of funding as a way of giving back. You can also get involved in city or state Small Business groups, or find one that focuses on helping new female entrepreneurs. There are many programs and organisations that want small, local businesses to thrive, as they understand it’s great for the entire community’s economy.
Reminders and warnings.
If you’re seeking business funding, you have to have a rock-solid plan. Seek the advice of fellow businesswomen who have successfully started and grown their own business. Their expertise yields invaluable insights that will prepare you for what lies ahead in your entrepreneurial career. You should be open to change as well. One reason many new businesses fail is because entrepreneurs weren’t able to make the necessary adjustments to accommodate changes in the market and industry regulations. Don’t be overly attached to an idea or concept, as you could miss tangible opportunities and fail to adapt.
If you do accept investor money, be clear on the terms. You don’t want to obtain funding and then have conflicts on ownership or profit-sharing. The last thing you need when you are starting your own business are legal issues. Last but not the least, don’t forget to incorporate your business and apply for any trade marks or patents. You have to protect your intellectual property which could be your ticket to having a competitive advantage.
Entering the business scene as an entrepreneur could unlock for you a life of stability and fulfilment. To make things easier and to ensure you won’t be alone in your journey, we recommend consulting with fellow businesswomen, especially those who have ‘been there, done that’. It’s always better to work together and have more people to share your success with.
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