This article was written by a member of the Women on Business community. Learn more about the author at the end of the article.
Financing a business is usually the one sure thing that puts a lot of mums off getting that idea off the ground and turning it from a dream to a reality. Many often wrongly assume that without thousands of pounds worth of capital, they can’t get their online business up and running. Here are a few ideas on funding a business to get you thinking creatively about business funding:
1. Who Do You Know?
If you can avoid having to pay interest on a loan, then you should—and this means asking friends and family for help.
You’d be surprised how many of your nearest and dearest would jump at the chance of investing in an online business if they can see its potential. You can decide whether you pay back the money, or give them a percentage share of the profits after a set period, when the business is more established.
One word of caution, though: have a good think about how a potential fallout could affect your relationship. A good way around this is to draw up an agreement detailing what you expect from both parties, and under every possible circumstance, that way no one gets a nasty surprise, or feels taken advantage of.
2. Look for Grants
Sometimes government changes cause a reduction in funding for businesses—grants included. However, grants haven’t disappeared altogether. Websites like Grants Online have a directory of available funding for all types of businesses, so have a look.
3. Free Money from Crowdfunding
There are nice people in the world that see a good idea, a community enhancing project or just have goodwill and will literally donate money towards your business idea. And you don’t have to pay a penny back!
Crowdfunding isn’t to help you pay for a loan, or living expenses, but if you need equipment for your business, or a van to be specially converted so you can run a workshop or food outlet from it, for example, you could use crowdfunding for that.
4. Last Ditch Attempt – The Bank Loan
Asking the bank for a loan is still an available option, it’s just that these days, all lending has been tightened and you have to jump through a lot more hoops to get any money at all. Plus, there’s the interest on the money you borrow, and having to pay back that money whether your business is a success or not!
About the Author
Joycellyn Akuffo is founder and editor of Mothers Who Work, a lifestyle website dedicated to working mothers.