IV. Ingenious Funding ideas for Financing Your Start Up
Section B: Creative Ways to Find Alternative Funding
All throughout this course, you’ve been learning about the same types of strategies that Sweet Tea Leaf founder Clayton Christopher used to get his business off the ground…and that is to start small and reinvest your profits. If you use that strategy along with the following funding strategies, you’ll quickly discover that there are no obstacles to growing your business.
Let’s take a look at the first method . . .
Method 1: Dig Into Savings
This isn’t glamorous. It’s not a funding method that’s a big secret. And yet for whatever reason, some people don’t even consider dipping into their savings to make their entrepreneurial dreams come true.
Look at Clayton Christopher, who used his own savings to start a business that went on to become a multi-million dollar beverage company. He believed in himself and he believed in his business model. He was willing to risk his own money because he knew it was worth the risk.
Let me ask you . . .
Do you have this level of confidence in your business? If not, then you need to do some market research and testing to determine if your business idea is viable.
Method 2: Tap Friends and Family
Here’s another pretty common method when it comes to funding a start-up business. The benefit is that even though you’re getting a loan from your friends and family, you’re not selling your soul to them.
Perhaps you may feel uncomfortable asking friends and family for money. However, keep in mind that you don’t need to ask one person for the full amount. Instead, you can spread the risk around to your friends and family by getting smaller amounts from multiple people.
Take note . . .
Just because you’re asking money from friends and family doesn’t mean you should do so casually. You’re starting a business, so draft a loan agreement that shows your professionalism. This means you should specifically state how and when you’ll pay the money back. Creating this sort of agreement will allow your friends and family to feel more at ease about loaning you the money.
Ok, that’s a pretty basic way of getting the funds you need. Now let’s start looking at some more interesting methods . . .
Method 3: Use Crowdfunding
Crowdfunding refers to having many contributors giving you small amounts of money, rather than having a few people giving you large amounts of money. And unlike the venture capitalist sharks who require your soul in exchange for their money, your crowdfunding contributors aren’t going to make you sign your name in blood or request that you hand over your first born child.
Instead, your contributors might be satisfied with a variety of both tangible and intangible rewards, such as:
Dinner with you.
A free product or service once you’ve launched.
And similar rewards. To get an idea of what works in your industry, look at what similar fundraisers are offering, and how well people are responding to it.
To get your fundraising campaign off the ground, all you have to do is set up your project at one of the most popular crowdfunding sites, which include:
Take note that these fundraising sites work best when you promote your project. In other words, don’t just upload your project and sit on your laurels. You need to get out there on Facebook, Twitter, and other social media to promote your project. Blog about it. Tell your list about it. Stop people on the street and tell them to check it out.
In short, let your enthusiasm for your project be contagious.