Funding is one of the hardest things to do when starting a business. Whether you’re using your personal funds to put the capital together or going bank to bank in the hopes that one of them will invest in your idea, the journey to building a business with the right capital is a mission.
It’s every entrepreneur’s dream to have all the capital they need to finance their business ideas without the need to request any assistance. However, like the handy help that can come in from searching up your Super Bowl odds when placing a bet, asking for help, even when you’re in a healthy financial position to finance your business, can also come with its benefits. Let’s explain this in a little more detail.
Is It Possible To Finance Your Business Without Any Help?
Every business owner is well aware of debt financing, which is a good way to finance your business through borrowed money. The main advantage of borrowing money as a funding method over creating partnerships or exploring other financing options is that you can still retain full ownership of your company. But on the flip side, debt financing means you’re now obliged to pay back the borrowed money, and should you fail to do so, the lender can eventually force you to liquidate your assets.
By using equity to fund your business, you’ll be selling ownership within your company. Here, you won’t be obliged to repay your investor; however, this will come at the expense of you having to give them a portion of your business. It might seem like a small price to pay for now, but giving away a portion of your business means you will lose partial control over decisions that will be made regarding your business.
By looking at what’s just been said about either exploring debt financing or using equity to fund your business, you might assume the best solution would be to finance the business from your own pocket. This will obviously come with many advantages, but the main perks to exploring this option would be that this could create an opportunity for you to run your business without the stress of needing to pay someone back. You’ll also be free and flexible to run your business the way you want since you’ll have full ownership over everything.
But as you may know, everything comes at a price. By solely being responsible for financing your business, you risk possibly getting into personal debt to cover business expenses that you’re struggling to cover and also risk landing bankrupt. Also, choosing to finance your business yourself won’t guarantee you’ll have all the money you need to start the business, as the money you’ll likely put together from savings and retirement accounts may not be enough. So, you’ll either have to start small or wait longer to acquire enough funds to put the money you need together to start eventually.
Therefore, yes, it is possible to finance your business without the help of any third parties; however, it’s only wise to research all your options, compare the pros and cons, and make an informed decision based on what your needs, goals, and plans are at that moment.
Choosing The Right Type Of Funding To Finance Your Business
Funding your business doesn’t mean simply looking at your pocket and asking yourself whether or not you have enough to start a business. There’s a lot more to this, and if you intend to find the proper funding to finance your business, you need to consider the following factors:
- The industry you’re in
- The network and social circles that you’re part of
- How much money you need to finance your business
- How quickly you need the funding
- How much ownership you intend on keeping
Raising Funds To Fund Your Business
After choosing a type of funding that you know will work to suit your business needs from a financial point of view, you have the following options when it comes to different ways that you can secure funding for your business. These include the following:
- Bootstrapping
- Loans from family and friends, or banks
- Private partnerships
- Venture capital
- A business incubator
- Crowdfunding
- Small business grants