#creativefundraising

Starting your own business is an exciting prospect but requires funding irrespective of the business scale. However, raising the requisite funds is not an easy task and will entail tapping various funding sources.

 In this blog, we discuss creative and effective ways to raise the necessary funds to set up and grow your business.

Fund-raising methods

1. Investing your own funds

Investing funds from your pocket or self-funding your business is probably the first mode of fund-raising you would prefer. This method of business funding is also called bootstrapping. Bootstrapping includes funds from your savings, from minimal or no-interest credit cards, mortgages taken out on your home or other assets, etc. It gives you full control over your business and keeps you free from external influences. However, it does require disciplined financial management. Moreover, if your business does not perform as planned, you are likely to be burdened by considerable debt.

2. Reaching Out to Friends and Family

Approaching friends and family for funding is another quick and straightforward way to raise capital. Your family and friends will be more easily convinced by your envisaged business idea than banks and other investors. Ensure you are on the right legal footing when borrowing from family and friends, particularly if you intend to pay interest on your borrowings. Make sure to have clear agreements to avoid misunderstandings and maintain healthy relationships.

3. Crowdfunding

You can employ crowdfunding to finance an interesting business idea through online platforms like Kickstarter, Indiegogo, and GoFundMe. Use these platforms to pitch your idea to the public. If your idea catches on, you will successfully find backers to fund your business idea. However, since many companies compete for backer attention, you are likely to succeed only if you can generate adequate buzz that cuts through the noise generated by your competitors. In exchange for their support, crowdfunding backers often receive perks or early access to products.

4. Angel Investors

Angel investors are wealthy individuals who have funds to spare and are willing to invest in fledgling business ventures they deem profitable. They generally provide capital in exchange for equity or convertible debt. The benefit of taking on angel investors is the valuable mentorship and industry connections you gain along with funding for your startup.

5. Venture Capital

If your startup displays potential for high growth, you can attract venture capitalists (VCs) to invest in it. In exchange for funding, you will have to provide VCs with equity in your business. Typically, VCs prefer to invest in the innovation and technology sector. While you can avail of substantial funding, strategic guidance, and better access to resources from VCs, you’ll have to give up some control of your company.

6. Business Incubators and Accelerators

Business incubators and accelerators generally operate near business colleges and offer funding, mentorship, office space, and resources for budding entrepreneurs. They work to groom startups and make them attractive to investors. If you have a young start-up then this is a great way to commence operations. Both offer different kinds of financial support with incubators usually supporting the formation of a startup, and accelerators advancing growing startups to help scale up the business.

7. Small Business Loans

Various banks and financial institutions offer small business loans, but qualifying for a loan could be difficult. You could also resort to borrowing from alternative lenders who also provide loans to help out small businesses. Such loans are more accessible but you can get caught in a predatory web if you are not careful about whom you are dealing with. Research and compare options to find the best terms and interest rates.

Raising funds for your startup or small business can be intimidating but with a little bit of creativity, persistence, and a clear vision you will be able to finance your business operations successfully. Choose a funding method or several methods based on the size and growth of your startup, By exploring various funding options, you will be able to find the right fund-raising methods that help propel your business to success.

Finlotax: Take Control of Your Finances with Our Expert Team in CA

It has certainly been quite a week. I was going to be filming the main campaign video today, but over the course of the last two weeks I have worked from Plan A to Plan D! (Plan D involves filming no one and instead, creating a film with a series of photographs, subtitles and a voiceover (probably recorded by me!)

As things have changed incredibly quickly this week, it has led to us rethinking our plans. Although a giving week can still be done even amongst school closures, social distancing and self-isolation, I have certainly wondered if in 14 weeks’ time it is going to be appropriate to run a fundraising campaign.

The financial impact of Covid-19 has barely started and yet we all know someone who has serious concerns about how they are going to pay the bills, charitable giving is going to be very low down the priority list. We have already had a couple of ideas about reframing our campaign in light of the new financial, political and social climate we find ourselves in.

The school has already received calls from parents who are worried about how they will pay school fees and so shifting our fundraising asks to focus on the very pressing need of providing bursary support for families who are impacted by this crisis is one way we could reshape our campaign.  

Another part of my campaign was including a bookmark in the relevant house colours as part of the pre-campaign mailing. This was going to tie in with the library’s 150th-anniversary celebrations and provide a useful reminder of the campaign. We could send the bookmarks to all our pupils and alumni explaining what we were planning to do, why we aren’t any longer and asking them to send us photos of their bookmark in the book they are currently reading. Thus creating loads of material for social media.