Getting out of debt takes a lot of hard work and you’ll need to ensure that your income is always higher than your expenses in order to have something left over towards paying off debt. Starting a business is a a great idea for unlocking another stream of income through which you can have more money to pay down debt faster. The problem however is that it might be hard for you to raise the funds you need to start you business.
Of a truth, people won’t be lining up to give you money to fund your business irrespective of how innovative or exciting your idea sounds. In fact, you might find it hard to obtain business funding if you are already struggling with a debt burden. Nonetheless, there are hundreds of creative ways to fund a business idea. In fact, you’ll have find more options to fund a business than to fund a big ticket item such as a car or vacation. This piece provides insight into four creative ways to raise funds for your business.
1. Put your money where your mouth is
If you are serious about starting a business, you’ll need to show a sense of commitment by putting some of your own money down. It doesn’t matter if you have to sell your car, move into your parents’ basement, or cash out a significant part of your savings – investors won’t be willing to risk their money if you don’t have a commitment to risk you money. If you don’t have any savings, you should consider getting a personal loan – the most important thing is that some of YOUR MONEY must go into the business.
2. Barter equity or services for stuff you need
One of the most creative ways to raise funding for your business is to barter your skills or equity in exchange for some of the stuff or services you need. In most cases, battering won’t raise you cash but it would get you the stuff that you’ll need to buy with cash. For instance, you can offer little equity in exchange for bookkeeping/accounting services or in exchange for on-demand legal services. If you want to start a social media management firm, you can batter your skills in exchange for computers, tax filing or even co-working space.
3. Negotiate deferred payments for inventory and equipment
If you want to start a small business geared towards production or sales of goods, you can find ways to reduce your startup capital by negotiating some deals. On equipment, you can negotiate to take ownership once you make the down payment while you spread out the balance over several months or years. If you want to sell a finished product, you can negotiate a situation where the manufacturer releases stock to you on the condition that you’ll pay for the said stock after you’ve sold it. If you want to start a production-oriented business, you can negotiate for the supply of raw materials on credit, which will be paid when you sell your finished product.
4. Start a crowdfunding campaign
Irrespective of your opinion in the wisdom (or foolishness) of following the crowd, the crowd could provide you with an important lifeline when you are seeking funding for your business. Launching an online crowdfunding campaign is a smart way to test the viability of your business idea with potential buyers, users, and investors. You can raise decent money, generate buzz, and attract bigger investors if members of the crowdfunding platform think that you’ve got a great idea, team, and strategy. The best part of crowdfunding is that the funds you raise are usually pledged in exchange for products or memorabilia; hence, you’ll have fewer reasons to worry about losing equity.