Kick-starting a new business venture can seem like a daunting task, one with numerous obstacles and seemingly insurmountable challenges on the road to success. While it is only natural to fear the unknown, there is nothing that can’t be achieved with meticulous planning and preparation.
That said, one of the biggest problems aspiring entrepreneurs face in the modern world is actually obtaining the necessary funds to begin their journey. In an ideal scenario, you would already have a deep enough finance pool for this occasion; however, the reality is oftentimes quite different. To help you start your company and reach your first year with a positive bank account, here are the best tips on how to finance your new business venture.
Is your idea something that will appeal to the masses?
First things first, consider if your business idea is appealing enough to grab the attention of the online community, and gain the support of small, but numerous investors around the globe. There are plenty of successful companies that started out as mere kick-starters with a great idea and a sound growth plan that people could trust in and support.
In order to grab the attention of a global audience willing to invest in your business idea, you should take care of some essential tasks first. First off, you should have a strong business plan in place, one that will convince your potential investors that your business is worth their money. It’s also important to appeal to their emotional side by including a video of you introducing yourself and your idea.
Find local investors
This can work for an online, global business venture as well, but if you’re planning on focusing on your local market and community, then finding local investors to support your cause is the best way forward. First off, you want to research prominent local investors and their investment history, their likes and dislikes, and tailor your pitch accordingly.
You want to have everything meticulously laid out for them to review, from a short introductory video presentation to your comprehensive financial plan, all the way to your visuals and brand values. After that, you can schedule a meeting and start working on your verbal presentation.
Check your credit score and snag a sizable loan
Obtaining a business loan is by far one of the most widely used financing options for a new business venture. As an aspiring entrepreneur hell-bent on making it big in the years to come, you should consider the best small business loans that will allow you to start and grow your business safely, with a favorable interest rate to boot.
When deciding on the size and conditions of the loan, the lending agency will take into account your creditworthiness, so make sure you tidy up your credit history beforehand. You will also need to provide a copy of your business plan and financial projection to prove your idea is financially feasible.
Consider angel investors as well
Angel investors – people who are willing to invest in your company without expecting anything in return – might not be easy to come by, but putting some effort towards finding them might be worth your time. Usually, these will be affluent family members and even close friends who believe in your idea and whom you can convince to trust in your ability to pay them back in due time.
In order to preserve your relationship, though, it’s a good idea to write up a legally binding agreement nonetheless, as money has a tendency to put even the strongest of bonds in jeopardy, so consider this option as your last resort. When you do find an angel investor, make sure you put money aside every month toward reimbursement in the near future.
Tap into your pension fund
You might not have been aware of it before, but there is a way to tap into your 401(k) without penalty due to certain tax provisions – but only if you follow the right steps. Keep in mind that if you don’t have the age permission to tap into this financial source yet, you may be subject to financial penalty, so tread lightly.
The process, although seemingly simple, requires the meticulous execution of several legal steps, which is why you want to employ the services of a trusted financial lawyer and financial advisor in order to set up the right corporation and retirement plan. This will allow you to safely put your retirement assets into kick-starting your business.
Obtaining the necessary funds to start your new business venture is no walk in the park, as it requires thorough planning, meticulous research, and fast decision-making in order to be successful. Consider these viable methods in order to acquire the necessary finances and pave the road to long-term solvency in the near future.