When you have a great business idea, and a great passion, funding is usually the sticking point preventing you from turning your dreams into a reality. It can be easy to settle into the status quo and not make the leap from your safe, traditional job towards entrepreneurship but the payoff from having taken that risk can be well worth it. Planning is the most important aspect of any major transition; this is no exception. Getting your life, mind, and finances organized in a way that facilitates comfort and as much ease as possible is the best foundation towards a successful startup.
Create Wiggle Room
Evaluate your existing household budget and see where you can make cuts to free up cash to allocate towards your business goals. Debt is a great place to start because depending on your interest rates and total amount owed, paying off certain debts can create extra funds each month. For the debts that might be too large to pay off in full, like student loans for example, refinancing is a great solution. You can refinance your existing student loans with a private lender in order to save money on your monthly expenses. Although this might not create a huge amount of available funds each month, it is a great start and refinancing also provides you with a chance to decrease the total amount you will end up repaying with interest costs included, which is a smart financial choice regardless of your outside goals.
No-Interest Loan Options
Inquiring with family and friends about the potential for financial support can be a cost-efficient way to dedicate money towards business funding. Borrowing money without bank involvement can mean little to no interest on the loan, which lowers your overall financial responsibilities regarding repayment. Additionally, people that are in your life on a personal level understand your work ethic, dedication, and ability to create a profitable business out of your dream. Those who know you and your habits will take less convincing than a lender who simply knows your business plan will.
One of the most current and trendy ways to fund a startup is to crowdfund. Using online platforms and social media to generate a buzz about your business ideas and request for financial support is a great way to reach a large audience that extends beyond your personal relationships. This option also allows people to give what they can, and small additions can total up to large sums. You would not take out a $50 loan from the bank to fund your project, but multiple $50 contributions from crowdfunding sources will add up quickly and help you meet your needs.
Something to know regarding this method though is that potential investors will want to know much more than just your broad plan. People love a story and will want as many details as possible so they can really rally around their choice to financially support you. Be mindful of promises you make in your introduction and request for funds and be realistic about timelines. Managing the expectations of those who contribute to your dream can help you to avoid negative clapback’s from confused or disappointed supporters.