Funding is among the most common financial problems that most startups face. Learn how you can overcome this hurdle to push your business forward.
Startup funding is always a significant challenge that most entrepreneurs face when dealing with a business startup. Receiving financing from the traditional lending institutions without an established track record can be stressful. Sometimes, you may be forced to sell your assets and borrow from friends and family members to fund your startup.
You must deal with your challenges promptly and adequately to push your startup to the next level. Typically, startups rely on financial backups from various investors to survive, and most of them tend to find it difficult to manage their startup money well whenever there is an influx. Some of the most common financial problems that business startups face include lack of money from startups, mis-pricing, and underestimating startup costs.
Luckily, we are living in a world where technology has revolutionized every aspect of our lives. Technology has changed the way we do business and has cut down associated costs making it possible for everyone to engage in entrepreneurship. As a startup, you can take advantage of the numerous benefits presented by technology to push forward your startup without depending on the traditional lenders. Here are the top four ways you adapt to overcomer startup funding challenges.
Consider Working with a Financial Services Company
One of the best ways of overcoming startup funding challenges is by working with a financial services company. Apart from the requested money for the small business startup, a financial services company will also introduce you to numerous opportunities you never knew such as financing options from governmental institutions.
Financial services companies may also introduce you to traditional lenders such as banks who were unwilling to fund your startup. Financial services companies have been at the core of numerous business startups due to the quality of the financial services that they offer and their flexibility. They have smart ways of assessing risks associated with your startup and will guide you towards establishing a successful business venture.
Crowdfunding is a relatively newer way of getting money for small business startup. Websites such as Kickstarter offer incredible platforms where you can create your own Crowdfunding campaign. Typically, Crowdfunding allows anyone to contribute money towards helping your startup transform into a successful business.
You will put up a detailed description of your of your business on the Crowdfunding platform and then people from all over the world will read it and send you money to help you deal with the funding challenges. The business description that you put up should include your target audience, business goals, future financial strategies, how much money you need and why you think people should help you fund your startup. Consumers then choose to support your startup through a number of ways such as prepaying for your products or giving a direct donation.
However, you should remember the fact that putting up a Crowdfunding campaign doesn’t automatically result in funding. Numerous business startups Crowdfunding campaigns go unfunded every year but don’t be afraid to try out your luck.
This is always the first thing that most entrepreneurs will think of when it comes to addressing startup money challenges. For instance, the United States Small Business Administration provides numerous startups with the much-needed access to funding. However, you should keep in mind that this isn’t free money unlike what many people are made to believe.
If you decide to go for the SBA loans, then you choose between the 504 loan program, SBA advantage loan and the microloan. No matter the kind of option you choose, you’ll still be required to go through a traditional bank for the advantage loan.
Consider Working with a Business Partner
The idea of working with a business partner is always good. You’ve got the business idea while somebody else has got the money, so you join hands and implement your plan. You pull your funds together, and you overcome the funding challenge.
However, the process of selecting a business partner isn’t easy. You need to find someone who understands your business goals and is willing to fit in. You should agree to a joint direction to avoid bringing your business down. Remember to include a buyout clause in your agreement since you can’t predict what the future will bring.