So you’ve got an idea for a startup. That’s a good first step on the long staircase to entrepreneurship. From this point, you’ll need to make a plan and find the necessary resources to get your business off the ground. Let’s dive in to a handful of ways that you can prepare and get the funding you need to turn your bright ideas into a reality.
Preparation
Before you’re ready to seek funding from others, take some time to prepare a pitch for your business. Investors often ask a variety of questions before agreeing to pull out their checkbooks, so here are few basic pieces of information that you should have in your back pocket before seeking out funding for your dream job.
Show Current Success
If you’ve ever watched the hit show Shark Tank, you know that investors are looking for more than just a concept. They want to see results. It doesn’t necessarily matter if your idea is revolutionary; they want to see that you’re the kind of person who can turn simple ideation into execution. A good way to do this is through small-scale, low-cost experimentation, which can allow you to make a case for growth. Once you start asking for money from investors, know that they’ll be looking for quantifiable successes.
Show Previous Success
You should also highlight work you’ve done with other startups or businesses – whatever seems relevant in your industry. Highlighting yourself as an expert in the field is a good way to build rapport and trust, which will make investors more likely to work with you.
Show the Plan
Before you ask for someone else’s money, make sure that you know how you’ll spend it. Simply saying “We’re going to grow the company,” won’t cut it. How will their money improve your business? And more specifically, using the data you’ve gathered, what kind of return should the investors expect from their investments? Having answers to these basic questions will set you apart early on. If you’re looking for a place to start, take a look at this post on creating a business plan.
Personal Loans
When you’re first starting out, it may be difficult to acquire a small business loan. The small business loan industry usually wants concrete results from an existing business – that has been established over a few years – before lending to you. A good alternative for startups is a personal loan, which, depending on your situation, can give you $2,000 – $35,000 for your new business. The payback period of these loans is typically 36 or 60 months, so you’ll have time to get your business established while paying off this loan.
And once your new business has some legs beneath it, then you can begin looking at small business loan options.
Angel Investors
The term angel investor simply refers to professionals who are wealthy and willing to invest in a new generation of entrepreneurs and startups. In most situations, they need to meet…