Startup funding is an essential for taking your startup to the next level, and you might be surprised to know that many of the startups fail just because they cannot manage to raise required funds for their business idea.
Well, there can be literally hundreds of startup funding options, but if you are first time entrepreneur and don’t really know where to start, this article should be a helpful read for you. Here we list the 5 best funding sources every startup founder should explore to get the capital required to boost their business operations.
1- Consider Your Business Niche
There is a very good chance that your startup idea is special. For instance, you could be a single mom or your idea could benefit a lot of people. Currently, there are grants being offered for specific business ideas or owners that can boost your start-up accordingly. Therefore, you need to define your niche to qualify for these grants.
When you’re seeking funding for your business, you should provide a description of the niche of your business. For instance, why is your business different from others or why do you deserve a grant in the first place? You should consider approaching investors and discover financiers who are interested in financing businesses in the same niche as yours.
2- Look For Grants
Grants are the best channels for financing start-ups. Here, you can count on getting free money that you can put towards developing your business. Getting these government grants is a tough task but you can always try your luck until you get one. Look through various channels to find federal grants that can service your business idea.
Keep in mind that grants are available depending on the niche of your business as well as the demographics. Currently, there are grants available for minority business owners, single mothers, women and many more categories. Most of the grant applications require extensive proposals where you describe every aspect of your organization.
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Currently, there are numerous startup contests all over the world that encourage innovation in exchange for a huge financial reward. Take an instance the Amazon Web Services contest with annual rewards of $50000 in a capital and the same amount in credits to the business every year. There’s also MIT that offers $350,000 in rewards for the pitch, accelerate and launch contests. If you want to win these contests, you should make your project unique from the rest of the competitors. It’s ideal to make your idea as original as possible.
Indiegogo and Kickstarter are some of the crowdfunding platforms for new start-ups. It has become one of the popular ways for new owners to get money and additionally create intrigue from other businesses and investors. With all the popularity means more competitors so you need to make sure your business idea is very unique.
Use the SBA to find out if you’re eligible for any loans. There are various types of loans available such as micro-loans, disaster recovery loans and much more. It’s much easier than getting a bank loan since the application process has become stricter. If you choose to contact a bank for a small business loan, you should provide a lot of information about your business.
For instance, you need to describe your financial status and how you expect to use the loan if granted. You should consider checking out the smaller and community-based banks since they are more understanding than others. Additionally, they are always looking for new ways to boost the community’s economy.
The Bottom Line:
Although it might sound hard and difficult, if you follow the right channels, you can get enough funding for your business. Therefore, do a lot of research, talk to many investors and other similar business owners and find out where to apply for loans. There are many avenues to get funding for your business as long as you’re diligent enough to find them.