A few weeks ago we disclosed a few thrifty ways to support your beautiful biz in its start-up phase (READ HERE), because we know what it’s like at that intersection of leaving your “safe something” and following your passion. As humans, we are all chasing that thing that lights us up, but as entrepreneurs, we have this insatiable need to go to it, save the world, and make it our reality pronto, sometimes without really considering how we will sustain said passion-based business. So today, we’re going to go there. We’re going to go one step further, complementing a mindset shift from simple and small, to playing bigger, and getting serious about where the capital for your growing business is going to be coming from.
Friends and family
Do you have a friend or family member that can help to fuel your business? Someone who is a big advocate of your work and message? This mutually beneficial arrangement can allow you to access a secure, known source and agree on terms that feel right for both of you. Although they are familiar to you, still draw up a contract or put your agreement in writing, with all stipulations, so that you are both on the same page from the get go.
Typically used via the online platform, crowd funding is when a group of people collectively raise capital for an idea, project or business in return for some kind of benefit. Which crowd funding method you select depends on the type of product or service you offer and your goals for growth. The three primary types are donation-based, rewards-based, and equity crowd funding. Some popular sites to check out include Kickstarter (https://www.kickstarter.com/), Pozible (https://pozible.com/) and GoFundMe (https://au.gofundme.com/).
Professional angel investors work with entrepreneurs in pooling resources and growing startups. They often interact in a hands-on way while helping develop a company’s daily operations. These investors typically provide seed money through either providing a loan, or by buying equity in a company.
Venture capitalists fund small businesses and start-up companies that are believed to have long-term growth potential. Risk is typically high for investors, but the downside for startups is that venture capitalists usually get a say in how the company or business is run.
Depending on what stage you are at with your business, and the position you are in to pay back the loan, securing a business loan from a bank could be an option. Shop around. See what other lenders are offering outside the bank you usually deal with, and always read the fine print. What other business building resources can they offer you beyond the loan e.g. templates, mentoring? Review and update your business plan in preparation to show how you intend to grow your business and pay back the loan.
Non-bank business loan lenders
Consider a broker in helping do the work for you. Sites like ebroker.com.au can help you find and compare suitable loans to match your business needs and circumstances from non-bank business lenders throughout Australia.
Generally administered through your State or Territory Government, grants can help develop your business with financial assistance, mentorship, advice, workshops and seminars. There are ample grants open throughout the year and cater for all phases of business. As a starting point, check out the Grant Finder (https://www.business.gov.au/assistance) on the Australian Government business website.
Now you’ve got a few more ideas in the how-to-fund handbag, we’d love to know what’s worked for you and your business, or how you are currently considering funding the growth of your business. Feel free to post a comment below!