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Six major ways to fund your small startup business

  • Starting up a new small business can be so promising and joyful. The excitement of starting something new from scratch, the freedom of being your own boss, the prospect of becoming the new success story -  top rated, forbe-listed entrepreneur - all these put together is more than enough to cause you a headache.

     Nevertheless, starting up a new business can be a tough row to hoe; it comes with a series of challenges that only the determined can surmount. Prominent among such challenges is fund. As a young, vibrant, promising, and prospective entrepreneur, you’ve perfected your business idea—the products/services to sell/render, how to go about it, the skills set required, the target clients, and so on. Then, you hit a dead-end: how do you get the basic fund to kick-start the business?

    This piece looks at ten significant means you can get funds to start your business. Please note that as a new startup, you don’t have any portfolio to boast of to convince people to fund your idea, the only portfolio you have is your packaging. Thus, you must be able to package and present your ideas in a way that will make potential donors believe in its viability.

    Related: How to get started as an entrepreneur

    Online crowdfunding platforms

    Thanks to advancement in technology, there are now digital platforms that allow people to seek financial aids to finance their projects—business, education, research, health challenges etc. All you need to do is to register on the platforms and follow their procedures. Don’t forget, how you package your idea will influence how people would believe in it and eventually support you. Examples are Indiegogo, GoFundMe, etc.

    NGO/Philanthropic donors

    There are also many NGO’s and philanthropists who are willing to help startup projects that have promising and viable prospects. All you need is a well-packaged business proposal that clearly states all that your prospective business represents. Some examples of these NGO’s are the Tony Elumelu Foundation, GroFin Fund, AYEEN Financial Grants, Oxfam, etc.

    Personal savings

    While starting up your own business remains a cool idea, it’s always advisable for fresh, young graduates to take up some jobs before planning to stand on their own. Apart from the fact you get to have some personal savings to invest in your dream startup business, the work experience you will get in paid employment will also be of great value to you when you eventually start your business.

    Soft loans

    This funding opportunity is usually made available by small/microfinance banks and other specialised banks such as Bank of Industry (Nigeria). It is called soft loan because terms are usually favourable; the interest rate is meagre and the mode of payment is very flexible as it is meant to support SMEs.

    To read more about soft loan and how it works around the globe, click here.

    Family and friends

    If you have family and friends who can assist, it’s equally a viable source of getting funds. All you may need is to show that you’re serious and passionate about the business and you are not just making stories up to swindle them. This also goes back to PACKAGING.

    Partnership

    If you have a viable business idea but find it difficult to fund it, you may consider partnering with people or companies that have the capacity to support the business. While this means you may not have complete control over the business, it sure ensures that your business idea doesn’t sink into oblivion.

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