Discover five unconventional methods to raise funds for your small business.
Nearly every startup is short on liquid capital during the early stage of operations. To attract the much-needed funds, business owners sometimes need to go off the script and try non-standard channels.
For a small company, securing the funding for product development and aggressive marketing is a challenge that demands a lot of dedication and creativity.
Without assets to offer as collateral to the banks and with little value of company shares, most of the standard roads to stable financing are closed.
That’s why people in charge of finding investors must be fast thinkers ready to adapt to the situation on the ground and take advantage of any opportunities that suddenly open. Companies looking to explore alternative sources of funding can’t be too conservative since you can never know where the money might come from.
Some of the ideas discussed in this article may sound risky or unconventional, yet each of them could yield a significant contribution to company finances if you manage to do it right.
Related Article:5 Surprisingly Cheap Forms of Small Business Financing
Organize a Fundraising Party
There is nothing wrong in having a little fun while you are working, so you should consider temporarily turning your office into a party zone for friends of the company and use this opportunity to attempt converting them into investors. People tend to be more open to bold suggestions when they are relaxed, so business presentations conducted in a laid-back atmosphere have a better chance of getting through.
Naturally, you want to have a few deep-pocketed visitors sitting in the front row, but small investors can also be very useful if you are just making your first business steps. Printing "investor certificates" or complimentary t-shirts are some of the methods you can use to animate your guests and infuse some optimism into the event.
Pitch Your Idea to a More Established Company
Business is competition, but competitors can become collaborators. If you have a great business idea and lack the funds to realize it, you might be wise to invite another partner into the enterprise and share the profits. Approaching a more established company in your line of business with a proposal for collaboration can be a way to jump a few steps ahead of the schedule and push forward with your ambitious plans.
It is possible to arrange the joint venture in a variety of ways, and it is prudent to discuss this in advance with your partner and create a layer of legal protection, just in case. You don’t want anyone to steal your idea and leave you out of the project you initiated.
Make a Secure Side Investment
If your main business needs some time to develop, it may be smart to put the available funds into a different venture and direct the proceeds towards your long-term objectives. This is a strategy that demands a lot of skill and patience since you want to avoid making the wrong investment.
According to Freshforex, financial latest news about the forex trading from the well-known news agency fxstreet.com can bring back significant profits if you are following the trading patterns suggested by market experts. Combining short-term profit opportunities with a far-reaching business vision is the right mindset for an up-and-coming entrepreneur, especially if it’s not necessary to dedicate a lot of time to the side investment.
Sell Limited Quantity of the Product Before the Launch
Pre-ordering is a standard practice in many industries, allowing the providers to collect some money even before the product is shipped. In 2014, Apple picked up more than $4 million within 24 hours after making the iPhone 6 available to selected customers before it arrived at retail stores.
Of course, your product probably doesn’t have the same kind of appeal as the iPhone, but you could nevertheless gain some advance cash that will come in handy to pay salaries and intensify production. The only catch is that you must never sell more than you can realistically deliver within a short time since negative publicity that would result from unfulfilled promise would negate any gains from such a maneuver.
Related Article:5 Funding Options For Business Owners With Bad Credit
Apply for a Grant
Business owners need to keep a keen eye for available grants and subsidized loans available in their country/region since this can be an excellent source of funding that doesn’t depend on immediate market success. Many local or national governments run small-and-medium business programs that your company could be eligible for, while additional opportunities could be found for research-based businesses.
If you happen to operate in the European Union, you might also want to check whether you meet the criteria for one of EU programs aimed at SME development, as this could unlock access to a huge pool of non-refundable cash. It pays off to spend some time learning all the specifics and putting together a project proposal that meets formal application procedure outlined by the donors, as well as the policy guidelines.