Where to get money for business: 7 best options
Some projects do not require large initial investments. For example, money may be needed only to register a business. You can use your own living space as an office, convert your personal garage into a warehouse. Arrange the goods for sale on credit, and print advertising materials on a home printer. In this case, the business will start generating income with minimal initial costs.
According to statistics, about 20% of small businesses in the United States started their activities with $ 1,000 - $ 5,000. The majority (about 90%) of businessmen used their own savings for a startup, that is, without attracting bank loans.
More than 50% of successfully developing companies (as shown by the latest research by the US Small Business Association) were organized "at home" and required investments within $ 25,000.
The volume of costs is also affected in which country the company is opened. For example, to open a McDonalds cafe with a total area of 150 m2 in America, you will need to invest about $ 100,000, and in Moscow: $ 500,000 - $ 1,000,000. / P>
Where to start your own business?
Before starting your own business, you must:
- Decide on the direction. In this case, it is important to take into account personal knowledge, experience and skills. The more information a businessman possesses, the more likely the project will become profitable.
- Research potential competitors. This stage will allow you to understand how to make money on the chosen type of activity, what problems may arise and how profitable it is. The best option is to study the experience of both domestic and Western colleagues.
- Create a business plan. A rather laborious stage, on which the success of the entire enterprise depends, as well as the chances of attracting external investors. A well-written project will make it possible to avoid not only unplanned expenses, but also complete bankruptcy. According to statistics, about 70% of all small firms are closed during the first year of operation.
- Make an estimate. In this case, it is not allowed to use approximate calculations, the numbers must be accurate and reasonable. Not all entrepreneurs own enough money for a startup. According to research by the Kauffman Foundation Growthology: 34.9% of the start-up capital is a bank loan; 6.3% - financial assistance from relatives; 6.2% - money from credit cards; 22.6% - other sources and 30% - own savings.
How to start a business without money?
For those who do not have start-up capital and the ability to obtain external funding, a profitable option is the service sector and trade (hand-made products). You can start without having a staff, i.e. do the work yourself. The direction must be chosen based on personal knowledge (theoretical and practical). For example:
- Welder, plumber. May establish a company to provide welding or plumbing services. Over time, the range of clients will expand, which will make it possible to hire employees and deal exclusively with management.
- Fisherman. Knowledge of the fishing industry will allow you to successfully sell your own catch. Subsequently, you can open a store selling fish products and things necessary for fishing (fishing rods, hooks, tackle).
- Lovers of embroidery, knitting, etc. If the Internet is available, it is really possible to create a group or a website on which to display photos of finished products. Today, hand-made is at the peak of popularity, therefore (provided that the product is high-quality and relevant) this direction is financially attractive.
To increase the client base, it is recommended not only to do the job efficiently, but also to draw up a discount program and provide a guarantee (at least 6 months). In order for the company to constantly develop and improve its image, it is necessary to invest 33% of the profit (regardless of size) in its improvement. The ideal option is to transfer these funds to a special account at interest.
Amount required to start your own business
The size of the initial investment depends on many factors: industry, expected result, country of incorporation, etc.
Administrator "over a year ago
The essence of the method is to save part of the money you earn every month. In order to save money in this way, it is enough to get a job. Over time, you need to improve your performance as an employee. This will allow you to move up the career ladder and increase your income. Even if there will be no movement up the career ladder, income can be increased by doing a large amount of work or by taking on other additional work. Even if this does not work out, then with experience, you can change your job to a higher-paying one.
Similarly, if you have an operating business, you can save some money until you accumulate the required amount. You can study in more detail all the options for accumulating money in the topic under the title: how to make 1 million.
Banks issue loans for starting a business only on condition that collateral is provided. If you have property that you are ready to use as collateral to take out a loan, then it will not be difficult to get it. The risk of such loans for the bank is very high, therefore, they often do not single out loans for business start-ups among their services. Instead, two lending programs are offered: a loan for uncertain purposes and a loan for business development. In the second case, it is assumed that there is a working business for which there is reporting. In both cases, a deposit is also required. Thus, if you have not started a business yet and there is no money at all, then there remains a loan in the form of money for indefinite purposes.
If you are sure that your business will pay off the loan and the interest on it, then feel free to issue it. If you are not sure about the prospects of your business, then read other options for finding money, there you will learn how to get rid of such risks and fears associated with them.
A little tip. Choose programs with a fixed interest rate in rubles. In this case, there is minimal risk that loan payments will rise. Loans with a floating interest rate and in foreign currency are more risky in this regard. Although sometimes the interest on such loans may differ. Taking out risky loans can be justified for a short period of time - up to 6-12 months.
You can get an advantageous loan if it is required for the purchase of consumer goods. For example, for the purchase of household appliances. Stores negotiate with banks on favorable terms for the purchase of their products. Therefore, if your business requires such goods, then they can be bought using a loan. Such goods can be furniture and office equipment.
Borrow from friends or family
Search for an investor or business angel
You can get money from an investor or a business angel if your offer meets their conditions. As a rule, investors consider the very idea of a business very carefully. Based on your experience and the data provided by you. This data is a business plan. In addition to calculating the possible return on business, it is advisable to provide data on demand research if the business assumes the presence of demand. For example, if you are going to produce a new product, then you can conduct a sociological survey among potential buyers about their interest in this product, if they would like to buy it. It is also desirable to have a prototype that investors could evaluate for themselves.
Where to find money for business - this question is of concern to almost all individual entrepreneurs and founders of legal entities. Most types of businesses require some form of start-up investment. Even if for the start you only need the Internet, a telephone, and also for the start period you need to pay for accommodation, meals and travel, this still requires certain amounts of money.
Usually, the amounts to launch a project are large enough for a person to own them on a permanent basis. Accordingly, when starting a business, you need to find the very money that will allow you to start your business. Below we will tell you about seven main options for where you can get the first investment in your project.
- 1 1. Save money yourself
- 2 2. Take money for business development from friends, family or acquaintances
- 3 3 . Take loan money for a small business in the bank
- 4 4. Find an investor partner to create a business
- 5 5. Find a business angel
- 6 6. Subsidies and grants from the state
- 6. Subsidies for business creation provided by the employment center
- 6. Business Development Grant
- 7 7. Crowdfunding
Save money yourself
This option of receiving money for starting a business is used very widely, is reliable, but at the same time takes a fairly long period of time. You can save money from your regular salary, renting out real estate, pensions and scholarships, and profits from other businesses. The main thing is to do it regularly, for example, every month. It is very important to have sufficient income, financial self-discipline and be able to effectively manage the family budget. A very important aspect is willpower, without it it will be difficult to cope with the accumulation of the required amount.
If you have chosen the option of saving money from your salary, at the same time, you can go to increase your income by improving your skills and career growth, as well as, if necessary, and part-time work.
Borrow money for business development from friends, family or acquaintances
You also have the opportunity to borrow money for business development from relatives, friends or acquaintances. This option is suitable if you have complete confidence in the development of your business, and the amount of debt is small. Why?
If, nevertheless, the situation develops so that your business burns out, you will remain in debt to a relative or friend, which will have a negative impact on your relationship. In addition, the debt will have to be repaid as soon as possible, which will not allow you to rationally allocate the remaining resources and stay afloat. In addition, most likely, all your steps in business will have to practically report and prove that you are doing everything right.
If you have no other options at all, then you can use the help of family and friends, but we still advise you to try all other options before contacting this.
Borrow money for small business from the bank
You can borrow money for a small business both for an individual and for a legal entity or individual entrepreneur.
We all understand that the development of our business requires funds, and very often rather big ones. Today we will demonstrate 40 working ways where you can get money for your business. The methods are suitable for those who open their enterprise from scratch, or want to invest in development, or buy a ready-made business.
How much money do you need?
The very first question you should answer before you start taking any action is how much money do I need? And in order to answer it, you need to draw up a business plan with approximate financial calculations.
There is no point in delegating the preparation of a business plan to other organizations. They will make you an ideal financial plan that you simply cannot implement. Projected costs, profits and number of clients may not match reality. The financial plan will have to be edited and in the end you will come to the fact that you will completely revise it yourself.
The required amount of money must be written on paper to the nearest kopeck. Then you can draw up an action plan to achieve this amount.
An example of fundraising for your business
Suppose that we have a business plan and for its implementation we need 1. 00. 00 rubles. We are an employee and earn 28.00 rubles a month. It is from these data that we will build on.
Don't forget that business is not about making quick and big money. Business is movement towards your goal no matter what! In our case, hard work will begin even before the opening of the enterprise, since we must do the most important thing - to raise capital to open a business.
The goal that will stand in front of us is to save 1. 00. 00 rubles for 1 year. Yes, 12 months is a long time, but if you know how to become a millionaire in one day, then write to our editorial office!
As a result, for a year of hellish life and striving forward, we will save one and a half million rubles. This will be followed by an equally simple task - to open your own business with this money.
After doing a little research in the field of human needs, we can conclude that today the catch phrase "Bread and circuses" no longer satisfies. "Money, bread and circuses" - that's what is needed for the complete well-being of a person. But, as you know, there is always not enough money, so every second person in a developed country turns to creditors for help, in other words, borrows money.
That is why the business of providing loans is so relevant.
To start your own business, you need to meet four conditions
- Idea (in this case already exists).
- Business plan.
- Small starting capital.
- Register / legalize your business.
And whatever business ideas come to mind, money will always occupy an important niche. Without them, you can neither live nor do your own business.
Banks are not competitors
Of course, any bank can arrange for you to rent money, so to speak, but on certain conditions that do not always satisfy the borrowers. Job certificates, pledges, deadlines, all this stops people from contacting these institutions. Plus, high percentages make the problem more serious than meets the eye. And, then, queues. How much time do you have to waste in order to get a small loan. In the computer age, people are increasingly annoyed at the sight of this huge "tail" of the human mass. That is why borrowing money of this nature is beginning to be relevant.
How to open an MFI or business on loans
These can be small loans up to 30 thousand rubles, which you provide to the borrower using only one document - a passport. Or more serious amounts under the appropriate conditions.
This will include: