Anyone who’s had experience will tell you, keeping a small business afloat is more than just a little challenging. There are so many different ways that it can go under, from possible lawsuits because of a lack of insurance or just insufficient funds in general. Talent, creativity and even popularity simply isn’t enough to guarantee that a small business will continue to thrive. Fortunately, there are a few ways you can get some much-needed funding for your business.
The early stages when the business is still relatively small are often the most important. This is why many business owners tend to go for more creative solutions, such as (more on that below), and many others. After all, small businesses tend not to have departments dedicated to increasing funds, which means it’s more than a little vulnerable. Here are five top ways in which you can fund your small business and keep it afloat.
We’ll start with one of the more effective ways of , and that’s through invoice factoring. For any business out there that makes use of invoices, handing them out to customers and patiently waiting for them to make their payments within the timeframe - invoice factoring is most definitely the way to go. The long and short of it is that you basically sell your invoices to a third-party agency. What happens then is that the agency takes a percentage of the value of the invoice, but is then able to pay for the invoice straight away. It doesn’t need to be explained just how useful this can be for small businesses, but let’s just say that it allows a small business to take that much needed step forward and finally make some progress.
There’s the good old fashioned loan
This is a more traditional means of getting that much needed funding, and more often than not this is all small businesses need; a little push in the right direction to get the ball rolling. It’s about as simple as it sounds, you can apply for a loan and put something up for collateral. While this is certainly one of the simpler ways to get funding, just remember that the risks these types of solutions tend to pose can be quite high.
If you don’t know exactly what you need to do with the money you get from the loan, then perhaps it would be best if you didn’t apply right away. However, if you have a good idea about what you can do with the money in order to boost the popularity of your business and make the money back in the allotted timeframe, then you don’t need to look any further.
Crowdfunding is a make or break solution
Another relatively creative way of getting that much needed revenue, crowdfunding can be an excellent way to get in touch with your customer base while building a strong bond of trust with them. For a small business this can come as a godsend, because the amount that a successful crowdfunding campaign can generate can be surprisingly high. Of course, this means that you need to push through with what you promise them. Failing a crowdfunding campaign can sink your company’s popularity as quickly as success will raise it. Similar to taking a loan, this can have far-reaching consequences if you aren’t prepared to see things through.
You can get help from dedicated funding agencies
Business funding isn’t just a simple term anymore - there are companies out there who are dedicated to funding small businesses and getting them on their feet when it counts. Services such as Fundbox offers are a lot like a more lenient loan. You can apply for funding, upon which you’ll receive credits. While you will eventually have to pay the company back, with a fee, there are many different agencies out there with relatively affordable plans. For example, there are some that will only charge you for the credits that you use. It’s certainly a very viable option for any small to medium sized business out there.
Selling part of your business is a viable option as well
Sometimes you have to spend money in order to make money. While that doesn’t always apply in every situation, for a small business that has perhaps bitten off more than it can chew, selling assets could be quite useful. It basically allows you to start again, but you don’t have to sacrifice absolutely everything that you have worked for. You can sell enough of it that you don’t have to start over from the beginning, but this time armed with more funding and the all-important knowledge you accumulated through your previous experience. While it’s not something all small business owners might want to do, for those who aren’t sure which direction to go, a could be just what they need.
While all of these solutions are certainly viable, it’s still important to note that there is no substitute for passion and hard work. With invoice factoring, you are losing a small percentage of what you’re earning in order to get money straight away - you still need to know how you’re going to be using it. The same goes for loans, crowdfunding, business funding and even selling some of your assets.
You need to work very hard to ensure that your business survives, and the same can be said no matter the size of the company. If you don’t have the passion or the dedication to see it through, then the only thing that these solutions will do for you is buy you time. If you don’t know what to do with the extra funding you’re given then it’s just prolonging the inevitable. Remember why you started the business to begin with, and so long as you give it the love, focus and attention that it deserves you’re bound to succeed utilizing these solutions.