When it comes to financing, just having a business idea is one thing. Getting it off the ground to prove its value to investors, acquire customers, and ultimately earn profits is another. Start-up companies face all sorts of financial challenges in the early stages, including securing investments. Funding is even more difficult for start-ups in an economic downturn, with many investors wary of putting their money into unproven ideas that may not pan out.
Despite these difficulties, there are ways to finance your start-up. Many budding entrepreneurs who have taken their innovative ideas to the next level and launched successful start-ups have done so with limited capital. With creativity, know-how, and by taking advantage of available resources, you can access start-up funding.
Five Steps to Finance Your Start-Up:
Step 1
The first step in this journey has three key elements: working out how you will finance your start-up; understanding what your start-up actually is; and weighing up whether it is actually as great as you first thought.
Step 2
The second step needs to be setting a time scale and then getting your idea from paper into the hands of potential customers to see whether it really works in practice, rather than just on paper. This means creating a business plan and model that can develop, change and adapt over time.
It is vital that you maintain momentum throughout the early stages, which means ensuring customers are getting what they want or need. If you flounder or lose your way at this stage, you risk losing your start-up before it has even seen the light of day.
Step 3
Investors can inject life into a business but should only be considered when you start to see the sales take off. They will want to see proof of successful transactions before finance enters the picture, but they can also give valuable business guidance and contacts.
Step 4
It is important not to lose sight of your day-to-day running costs – be that cash or time – at this stage. If you are still broke or skint, you will find it difficult to justify spending money on anything other than your core business.
Step 5
Once you have proved that your start-up has the potential for profitability and growth, then, and only then, do you need to look into injecting capital into your company. At this stage, it is important that you understand what an investor expects from you, what they will do for their money, and how to work with them.
If following the above five steps is all a bit too much or you just want someone to help guide or give you access to capital that you can finance your business growth, then visit Wefunder Crowdfunding to find out how you can access capital.
Closing
Most importantly, be realistic with your predictions for the first three years of your business – no one wants a sob story on their conscience.
Despite these difficulties, there are ways to finance your start-up. Many budding entrepreneurs who have taken their innovative ideas to the next level and launched successful start-ups have done so with limited capital. With creativity, know-how, and by taking advantage of available resources, you can access start-up funding.
