10 Things To Do If Your Startup Capital Is Not Enough
Raising startup capital for a new business is usually a big problem for entrepreneurs. Little to no investors believe in your ideas, and the few who do, wait on the sidelines to see what would come of it before committing a single dollar.
The difficulties people face in trying to raise funds can be demoralising, and in some cases, kill the idea before the business even takes off. If you fall into these shoes, here are ten things you can do if you don’t have enough cash and need to raise funds to run your business:
1).Dream big, but start small:
At the start of any new venture, most entrepreneurs like yourself have an incomplete team and little to no funds to run their startups. But you’d always have yourself, your idea, and a plan to take off.
Use what you have, but most importantly, start where you are. As you progress, you’d learn some perks of running your business and what works and what doesn’t. Armed with this information and a little experience so far, you’d sound a lot more reasonable when you talk to potential investors to raise funds for your business.
Every great business, event, or individual started small. Trying to get ahead of yourself would keep you heading nowhere.
Remember: “Direction is more important than speed”.
2).Take Advantage Of Social Media & Word Of Mouth Advertising:
Social media has more than proven itself as a reliable tool to promote any business. Today, many fashion boutiques sell their items through Instagram, some through Facebook, and others through both.
Depending on what you’re offering, there’s always a social media platform with your target audience. If you have 1000 followers on twitter, start with that. By promoting to a closely targeted market through your social media account, you would be spending far lesser cash to promote it than you would have.
Remember: Social media and word of mouth advertisement can be highly effective and free!
3). Have a side income:
It can get really frustrating to run a business and have no returns for a long period. Sometimes it takes even years before you can turn a profit. But irrespective of this, the major problem is even if you can’t turn a profit soon, you’d need more funds to put into the business to sustain it till it scales.
One thing you can do is to have a side hustle, which could be a skill you offer as a service to those who need it. For example, if you’re great at building websites and mobile apps, instead of waiting endlessly for investors to pour in their money into your startup, you could market your skills to people who need your service, make some money from them, and put a large part of it back into your business.
Freelancing is a great way to raise funds for your business and stay afloat while you’re still sourcing startup capital for your startup in Nigeria or Africa.
4). Reduce your expenses:
With little to no real startup capital, you cannot afford to have expenses eating into the little revenues you’re generating. Check every way cash might leave your business and try to completely block it out. The more loop holes you cover, the greater your chances of staying afloat till you acquire considerable investment.
5). Talk to family & friends:
These are not just the closest people in your life, but are the major individuals that can give you some money with only a simple motivational speech.
Family and friends usually don’t require that you show them a business plan because, their loan or investment in your startup is motivated by their belief in you and not the idea or skills you possess.
Talk to the closest people in your life. If you understand what makes them tick, push those buttons and you may gain some financial support from their pockets.
6). Apply for a bank loan:
Banks are always available to assist SME’s (Small and Medium-Sized Enterprises). The problems they pose are usually confined by their excessively strict loan requirements. If you can meet the requirements they usually require, you’ll find it easier to raise funds from the bank in a short time.
7). Participate in startup competitions:
Startup or business competitions usually come with cash prizes. What’s most beneficial about these competitions is the access to mentors and a wider pool of investores you’d gain after winning or coming in in second place.
Take part in these competitions. If you win, you’d get some startup capital to fund your business. But if you lose, you not only get exposure, but you also gain access to mentors and potential investors.
8). Take advantage of grants:
Grants are sums given to businesses without any form of equity taken from your company. They are pretty much startup capital or investments where you don’t part with any of your company’s share.
There are a lot of organisations helping startups raise funds by offering grants to businesses addressing issues in certain categories. If you fit in, apply and you just might get lucky.
9). Use Creditors Money:
When people pay ahead for a product or service you’re yet to deliver, they’ve already put money in your pockets. You could either keep the sums and wait till you’ve delivered to the customer or you could invest the amount gotten while you deliver the service or product paid for.
The only disadvantage of this is if the customer wants a refund and you haven’t gotten any returns from the investment the money was put into, you’d be left stranded. This could damage trust and permanently damage your relationship with that customer and several other potential customers that could have come through that one person.
10). Find A Reputable Mentor:
They say, “if you ask for money, you only get advice. But if you ask for advice, you get money twice.” Getting a great mentor could be a fast track for you to get investment into your business.
These individuals usually know important people, and would be happy to talk about your business with potential investors if they see that you’re gaining traction. A smart mentor could even be the first to invest in the business before others try to get involved.
Find a good and highly experienced mentor, and cherish every advice he or she gives. It would all be worth it!
Above all else listed in this article, according to Robert Kiyosaki, it is crucial you remember that “It does not take money to make money”.
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What are your thoughts on these 10 things to do to raise funds if your startup capital is not enough? Let me know by leaving a comment below.
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