Are you trying to raise the funds necessary to launch a new business venture? Do you need some creative ways to help you put those funds together? If so, take a look at the suggestions below, as they are techniques that several business owners have used in the past to raise funding, outside of the more traditional ways.
Some entrepreneurs become frustrated when they are turned down for business loans, but that doesn’t mean you should put your dreams on the shelf. It just requires a little creativity. The ideas below should help you come up with a plan to help raise the required funding.
Peer-to-peer funding.
“Crowdfunding is great for many reasons. You are able to raise money before launching and you don’t have to give up any equity or ownership, and it also helps you validate an idea before sinking money into production. They trick is to stand out and get enough people to see your campaign.” — Jim Epton of Dom Huga Ltd
Look for possible sponsorship opportunities.
“Look for potential sponsors and create opportunities that are affordable and so enticing that they are impossible to pass on. There are plenty of potential partnership opportunities, so think of what you can offer and then identify the perfect companies to pitch.” — Robert Cox, Founder & CEO of Sundog Structures
Collect deposits.
“Pre-sell the product (like many video game publishers) or allow customers to put down a deposit for in-demand products (like Tesla). The funds from the pre-sales or deposits will give an influx of cash early in the business cycle.” — Matthew Kolb of All High Schools
Kickstarter and GoFundMe.
“Crowdfunding sites like GoFundMe and Kickstarter require that you be creative in your offering to get people to want to give up their hard-earned cash in order to fund you. It really makes you think about why people should care outside of simply how great your product or idea might be.” — Joseph W. Belluck of Belluck & Fox, LLP
Crowdsource.
“Crowdsourcing is effective. Product based businesses have a real edge when it comes to this route. Service-based businesses would have a much tougher time getting investors on board. Plan ahead and be prepared.” — Marc Webb, Founder of Real PDL Help
Combination of funding sources.
“Depending on the business, a combination of personal savings built from working a regular job or doing contract work, plus a higher limit business credit card, or even personal loans are a great way to fund and bootstrap a new business. You can also start small to build cash from an initial customer base.“ — Sean Christman, Founder of Slamdot
Raise via a soft launch.
“If you can take pre-sales or do a soft launch prior to investing serious dollar this can help you test and idea and judge interest levels. If high, then you can do a pre-sell to raise the funding needed. A lower price to early adaptors is a great way to get the early financial commitment.” — Ari Evans of AAA Handbags
Personal credit cards.
“If you are truly out of options and believe you have a golden opportunity, using persona credit cards is an option. You have to have full confidence in your abilities though, because if you fail you will be stuck with debt you are personally liable for. This should be a last resort option.” — Tom Munroe, CEO of RugStudio
Explore pre-payment opportunities.
“If selling a product, one can try pre-sales or crowdfunding to fund development of the concept. If offering a service, try securing client contracts at a discount for pre-paying for your service offerings (it takes a leap of faith on the part of the customer, of course).” — Shawn Schulze of HomeArea.com
Bootstrap in the beginning.
“Bootstrapping is a great approach for multiple reasons. You don’t have to take on debt or give up equity, and you learn how to scale a business by getting in the trenches and working. Bootstrapping the growth creates hard working entrepreneurs that quickly understand the value of a dollar.” — Christopher Dziak, CEO of Pure Nootropics
Pre-sales can fund manufacturing.
“Utilizing pre sales to fund the manufacturing model is brilliant providing you are clear on your actual cost to build and have contingency in place for over runs. For a service based business, keeping your day job and building up your side hustle is the safest best.” — Shawn Freeman, Founder and CEO of TWT Group
Invite people to be part of your success.
“The most creative way to fund a new business I have seen is to use crowdfunding. The reason I think it is creative is because you will have people from all over the world who want to be a part of your success, and that to me is amazing considering you’ve never even met them in person.” — Ben Walker, Founder of Transcription Outsourcing, LLC
Roll it all back into the business.
“Roll every dollar of revenue generated back into the business. If you can run lean for as long as possible and avoid large expenses like office space and paying yourself, then you can really scale much faster and then explore those expenses once the business can afford them comfortably.” — Andrew Tran, Founder of Therapy