Raising money to start a business in the 21st century is one of the most challenging part of business. Many entrepreneurs have high hopes to be the most successful in their business, they have the zeal, blueprint and different strategies to attract client to their brand but when it comes to raising capital for the business, it looks like a huge roadblock. One of the misconceptions of raising capital for a business is that you need to have all the funds to start at the initial stage. Here are various ways an entrepreneur can raise capital for a business;
The first place to look at when starting a business is your savings, nobody will invest in a business without first asking you what you have on ground. Starting a business is more than just sweet talking people with your dreams and aspirations, when investors see that you have something on ground, it will encourage them to give your business a second look. One way to save for a startup is by working for a business owner who is established in your field; you save up while working for the person and also gain more experience in the business. if you want start a fashion brand, work for an established fashion designer for a period, save and then start your own fashion business.
Family and friends
This involves asking for support or borrowing money from families and friends. Whether you are asking for support or loan, it must be clearly stated to avoid conflicts in the future. If your funds are not enough, it is wise to seek for help from family members and friends before thinking of loan or investments. Before you approach family members, it is advisable to have a clear blueprint of your business, this gives you confidence when discussing.
There are people who like to invest in small scale business, many big companies were funded by investors who saw the potential in business at the beginning. Having this in mind, in order to get the attention of an investor, you must first capture your idea into a workable business plan as well as a good pitch. a good place to find an investor is by attending business seminars and events, some of these seminars allow entrepreneurs pitch their idea and meet active investors who attend.
Bank institutions provide loan to entrepreneurs who approach them. To get loan from the bank, you must have a solid business plan that conveys all the necessary details of your business. The financial institutions reduce interest rates for startups.
This is a way business owners, nonprofit organization and individuals seek for financial help from the public. With the advent of modern technology, it has become easier to seek for funds from people. Crowd funding sites are set for business owners to pitch their ideas to people who might be willing to support their business. There are different crowd funding websites which has the potential to create awareness about your product or service; they include GoFundMe, Kickstarter, iFundWomen, Wefunder etc. the challenge with using crowdfunding websites is that the competition is high, in order to get the attention of the public, you need to create an attractive pitch that will make you stand out.
if your business idea will contribute to the growth and development of the country, there are government provisions of funds for startup projects. You will be required to a submit business plan that will be scrutinized by the committee in charge of the grant. Government grant is a good way to get surplus funds for your startup; however, scrutinizing your business plan might take some time due to government bureaucracy. There are other nongovernmental organization that are targeted at providing startup capital for businesses
An amazing way to raise funds for your startup is by engaging in competitions that allows entrepreneurs to showcase their business pitch against other contestants who are interested in the same cash prize. As a contestant, you will be required to provide a strong pitch for your business as well as a comprehensive business plan. When you participate in competitions that are widely recognized, it gives your brand free publicity such that even if you do not win, you can leverage on the platform you have been given to promote your business. An example of such competition is popular reality TV show The Next Titan; it is a is a Nigerian entrepreneurial reality TV show which lasta for 10 weeks, contsestants with outstanding business ideas are rewarded with cash prizes and other gifts.
Other ways to fund your business in Nigeria are; the Lagos state employment trust fund (LSETF), Tony Elumelu foundation, fund provided by the Nigerian export-import bank (NEXIM), the Nigerian startup pitch competition.