Now that we know what to do, the next biggest challenge to figure out is the how. The how will decide how fast we are able to reach our financial freedom and goals. The how also determines the building blocks and sets a realistic timeline targeting every successful milestones.
There are over 94% of startups that falls flat during the first year of their business. Failure of success and endurance usually stems from the lack of strong funding. The long meticulous yet thrilling journey from the initial plan to income creating business needs a fuel named capital.
Capital is the fuel of any business venture and the million-dollar question would be - how do entrepreneurs finance their startups business? How do we get the money we need?
Presently, when might you require funding, it very much relies upon the nature and kind of the business. How much is determined by the industry and scale of the business. However, when you have understood the requirement for raising money, beneath are the funding ecosystem of the various wellsprings. Here is a brief guide that rundowns 6 funding choices for new businesses that will assist you with raising capital for your business.
1. Bootstrapping - Paying For It Yourself
In a nutshell, using your own funds be it from your savings or reserves or alternatively from family and friends.
2. Crowdfunding - Asking Help From The Public
A way to raise money from a large number of people. Large groups of people pool together small individual investments to provide the capital needed to get a company or project off the ground.
3. Venture Capital (VC)
Venture capital is a form of private equity and a type of financing that investors provide to startup companies and small businesses that are believed to have long-term growth potential. Venture capital generally comes from well-off investors, investment banks and any other financial institutions. This is the place you make the big bet. Venture capital (VC) are expertly overseen funds that invests in organisations that have tremendous potential.
4. Private Equity (PE)
A collective investment scheme used for making investments in various equities and debt instruments. They are elective investment done by pooling funds involving various techniques to procure exceptional yields for the investor.
5. Peer 2 Peer Lending (P2P)
An online platform that connects people who want to invest money to people who want to borrow money, while cutting out the middle man (ie: financial institutions). P2P lending offers a feasible option for business people who cannot fit the bill for bank financing.
6. Co-operative / Koperasi
The historical backdrop of financial cooperatives extends back to rural cooperatives that framed to offer credit and budgetary administrations to farmers. Consumer cooperatives may likewise be built up to make an assortment of items and administrations accessible to individuals, for example, social insurance, housing, insurance and etc.
Financial cooperative (co-op) is a sort of a financial foundation that is belonged and worked by its own members. The objective of a financial co-op is to follow up in the interest of a unified group as conventional financial assistance. These organisations endeavour to separate themselves by offering better than expected assistance alongside serious rates in the zones of insurance, lending, and investment dealings.
Each of these methods have their own pros and cons. Should you like to have a further in depth analysis and assessment of which type of funding would best suit your business do not hesitate to contact us for more information. We at MCM are always eager to hear from our avid readers, so leave us a message in the comments section.
“Knowledge Is Power, Knowledge Shared Is Power Multiplied” ~ Robert Boyce