Got a business idea that you think will work? Now all you need is the cash to transform your idea into commercial success. Getting finance to turn your idea into a start-up company is a lot easier than you may think. Contrary to popular belief, there are so many different avenues that you can follow to get the money. Here’s a look at a few of them.
By Craig Falck for Africa Report.
Photograph:© Erik Reis | Dreamstime.com
The first is obviously the easiest: Self-finance. If you’ve got the money to start your business and you know that it will work, why not invest your own money in it? Then you won’t find yourself needing to repay anyone for the loan – and the high interest rates! You will also be the sole owner of the business right from the start. But not every entrepreneur is this lucky to afford self-financing – luckily, there are numerous other financing options to choose from.
Banks have long been financiers for businesses, including start-ups. Before you go to your branch to fill out a loan application, do some research and find out which banking institution is more favourable towards business loans and start-ups. Then make sure that you have all your documents in a row – your business plan must be flawless because even the smallest issue will give the bank reason to deny your application. The best thing to do here is get your accountant to help you draw up this document as they will know exactly what the banks look for, not to mention being able to crunch the numbers and tell you whether it’s a good business plan or not.
Bringing in a partner/investor is another great option for a start-up. There are lots of people that you could bring in for this method of financing – friends and family, business acquaintances, other businesspeople… the list is endless. What you need to do here is be careful about who you bring in – you don’t want to sell a portion of your company to someone who won’t be interested in anything but the money, nor do you want someone you can’t trust owning part of your business. You will need to go through a rigorous screening process, not to mention have a watertight agreement.
There are also financing institutions that specialise in assisting young entrepreneurs with their business plans by getting their start-ups up and running. The problem here is that they take your financial situation into consideration, so unless you’ve really got nothing but hopes and dreams, you might find this one to be the wrong option for you. Plan ahead, and plan well.
Financing your start-up is a lot easier than you think simply because there are so many options available to you. That doesn’t mean you should just take the first one that comes along. Take your time and do some investigating – when you’re sure that you’ve found the best one for your business, go for it. You could be in business sooner and easier than you ever thought possible.
