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Trying to start a business without having capital has stopped many from realizing their dreams of being entrepreneurs.
Unknown to such people, there are other ways of raising funds to start your small business without even seeking to get a loan.
With the state of the economy and the constant menace of unemployment, starting your own business would save you from idleness, make you your own boss, and with time an employer of labor.
In the event that you do not have collateral to get a loan, these 5 tips will help you get started just has it has helped thousands of others.
1. Personal savings
Nobody will invest in you if you are not willing to invest in yourself. No matter how little it may be, save up some cash on your own before seeking other sources. People tend to be more willing to help those who make an effort on their own first.
2. Friends and Family
This is the second-best way to raise funds for your business. You might never know how much your friends and family can help you achieve your business dreams until you approach them. Cast your pride aside and ask for help when you need it and you might just save yourself a lot of stress.
Outside of getting financial assistance from your friends and family members. A crowdfunding account such as GoFundMe is a good place to solicit for support. If your project is convincing enough, there are still kindhearted people who will be willing to part with their money to help you.
4. Angel Investors
There are lots of business-minded people who are ready to fund start-ups as long as you are willing to part with some equity. Draw up a proposal that clearly states what you want to do, how you want to do it, and what you will need to do it. These investors could even be family friends or people who you relate with through different organizations.
5. Small business grants
This is a type of fund given by the government or some other privately owned organizations to individuals who want to start businesses but do not have sufficient capital. For most of these organizations, you only require a strong passion to succeed, willingness to help others, and a good plan. Organizations like these in Nigeria include the Tony Elumelu Entrepreneurship Program, Africa’s Young Entrepreneurs Empowerment Nigeria (AYEEN), and the Dangote Foundation.
6. Seek venture capital
Finding a venture capitalist who shares your vision, or at the very least believes in your ability to turn your idea into a successful, profitable venture, is a good way of raising cash. Of course, you will need a fine-tuned business model, ideally one that’s ready to scale. The main con with this option is that venture capitalists are typically looking for the next big thing, and so many entrepreneurs struggle to convey the scale-ability of their enterprise. Venture capital funds, by their very nature, have a short shelf life as they generally seek to recover their investment, turn a profit then move on to the next fresh start-up.