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Starting a Business for an Entrepreneur - 5 Finance Tips to Help Fund your Start-Up

Updated on July 29, 2017
This could be you - start your own business this year...
This could be you - start your own business this year...
Entrepreneurship begins with a good idea - follow through! You can do it!
Entrepreneurship begins with a good idea - follow through! You can do it!

Start Your Own Business Today!

With the explosion of the Internet and social media, there’s probably never been a better time to consider implementing that idea you’ve always had into a bonafide start-up company.

As an essential part of the American dream, the only impediment is gathering the funds for your imminent launch.

After taking an account of your business model and defining a business plan, the money is all that’s left to worry about.

It’s a good thing, then, that there are resources available – from small business loans, to crowdfunding operations for an idea that resonates with people.

Some options are better suited to your business plans than others, which is why it’s a good idea to research the following handful to see which ones are better fits.

Time to get your dream off the ground!

Have you ever considered starting your own business?

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Crowdfunding to start your own business - it's a viable option.
Crowdfunding to start your own business - it's a viable option.
Crowdfunding Infographic
Crowdfunding Infographic

1. Crowdfunding

Crowdfunding is not a new concept; however, because of the Web, it has taken off like never before with websites such as GoFundMe, Kickstarter, IndieGogo, YouCaring, Patreon and TeeSpring.

These are the top crowdfunding campaign websites as reckoned by Alexa rank, which is a valuable tool owned by Amazon.com for gauging traffic.

The beauty of crowdfunding in this day and age is how your petition for financial help can go viral, and get picked up by news outlets.

This, in turn, further gathers more parties interesting in contributing to your campaign or start-up.

It often takes just small donations from many parties to soon flood your petition with more money – that doesn’t have to be paid back – than you bargained for; but the cause has to resonate with your audience to be really successful.

Does crowdfunding sound like something you would consider?

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peer lending works too!
peer lending works too!

2. Peer Lending

This is usually called peer-to-peer lending; but, in this case, since you’re the one who needs money for at the moment, you should restrict your search to successful entrepreneurs with somewhat similar ideas.

Oftentimes, these people are quite willing to help fund – or fund outright – a business idea that looks like it will work; and they will do so for substantially less than the Shark Tank-like percentages, if any.

Then, when you become successful, you can become part of a peer-to-peer lending institution and let your money work for you, while also helping business dreams come true.

An example of peer-lending and loans - The Invicta Watch company started out as a small business  decades ago...
An example of peer-lending and loans - The Invicta Watch company started out as a small business decades ago... | Source
purchase order financier deal
purchase order financier deal

3. Search for Purchase Order Financiers

You’ve worked so hard to get your business ideas to the point where you can even consider a start-up; chances are, you’ve got some cash on hand.

The biggest problem most start-up ventures face is the ability to fill an especially large order; almost none of them have the cash on hand to meet that kind of demand (otherwise they probably wouldn’t be a start-up at all).

Once you’ve demonstrate proof-of-concept and sold a few products or services, enough to show that your stuff works, you might consider a special PO financing company. These companies specialize in loaning start-ups the money to fill purchase orders, so that you can start to reap the profits and have some cash on hand.

A somewhat similar option in the same vertical is factoring accounts receivables. If you’ve got a lot of orders already sold, but the payment isn’t yet due from those customers or the payment process takes several months, then factoring accounts receivables advances the money for these unpaid amounts so that your business doesn’t come to a grinding halt as it waits for the money to come in.

Source

4. Credit Card Use

You’d be surprised how many credit cards you’re suddenly eligible for once you put some feelers out there.

This can be something as innocuous as simply filling one out, and checking the box that allows the credit card company to share certain aspects of your information with their lending partners.

Before you know it, you’ll be receiving dozens of applications in the mail – and if your credit history is good, you’ll get the best credit cards you apply for.

This can be a huge boon to a start-up in need of starting capital, because the credit cards can easily total up to the amount of a small business loan.

The plan is that you will become profitable within a few months to a year, to avoid having to go back to work to handle your monthly payments.

Would you consider using credit cards to finance your business idea?

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Get your pitch right before approaching an angel investor...
Get your pitch right before approaching an angel investor...

5. Angel Investor to the Rescue

Angel Investors are not all that different from peer-lender; the one major difference is the amount of control they might want in exchange for the mentorship they offer.

You keep control, but they can ask for as much as 49 percent to justify the time, effort and resources they’re willing to put into your start-up.

The good side is that, unlike with a loan, an angel investor will be there with checkbook open as you need him – but at what cost? It’s up to you to decide.

After much hard work, she's open for business!
After much hard work, she's open for business!

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    • Crowdinvest profile image

      Crowdinvest 

      11 months ago from 3 Queen Street, Mayfair, London, England W1J 5PA, United Kingdom

      Insightful article and helpful for entrepreneurs. Every entrepreneur should keep working and learning about their industry. Test and improve their marketing strategies to smooth out the rough edge.

    • andrewdavidlowen profile image

      Andrew Lowen 

      2 years ago from Fallbrook, CA

      Great article! Thanks. I'm curious, have you tried different crowdfunding options? Any insight as to which ones were more efficient and brought in more business?

      Thanks!

    • ajshdelhi profile image

      Company Formation 

      2 years ago from Delhi

      Very impresive content dor Starting a bisiness

      Thanks

      http://www.companyformationsservices.com

    • zaton profile imageAUTHOR

      Zaton-Taran 

      3 years ago from California

      Thanks, Alex! Glad you found some use in it.

    • profile image

      ALEX FILANI-AJALA 

      3 years ago

      I am delighted with this expose on business startup

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