Perhaps you have little to no savings in your bank account, or you have many other financial responsibilities to take care of first–whatever the reason is, having little to no money is not always a hindrance to starting your very own small business.
If you are confident in your business plan and your skills as an entrepreneur, here are the best ways you can fund your business when you don’t have money:
Sites like GoFundMe allow budding entrepreneurs to raise money for a project or business idea. Crowdfunding sites let you set a goal amount for a certain period, for example, $2,000 in two months. However, crowdfunding is mostly viable for relatively low amounts–you can’t expect it to finance your entire business. Instead, it is best used for funding certain aspects of the company, such as your first batch of products or your business equipment needs.
2. Small business loan
Getting a business loan is one of the most common ways to fund a business and is often the first option that entrepreneurs consider. If your credit score is deemed to be good, then you might want to look into this funding option for your small business.
However, keep in mind that business loans are made the same, and it’s best to consider many options from different banks, private lenders, and credit unions. When you find suitable financial institutions to consider, prepare your business plan and presentation, then set an appointment with the lender.
3. Use your credit cards
Using your credit cards to fund your business carries some risk, but it is one of the easiest ways to lift your business off the ground. The key is to use your credit strategically and responsibly, as well as to pay your bill on time every month to protect your credit score. Do this only if you have complete faith in your business idea and know that there is a good demand for it. If your business tanks due to incomplete planning or some other poor business practice, your financial status might be put on the line.
4. Find investors
An investor can be a friend, a family member, a co-worker, a private investor, or other businesses. Similar to applying for a bank loan, you need to have a good business plan and presentation ready to attract people to invest in your company. Perfecting your pitch, even if you’re approaching family and friends, is the best way to get investors to trust you and your idea, so spend more than enough time working on it.
5. Sell your assets
If you can take the risk, selling assets is another good way to raise money for your business. Regardless of the asset you’re selling, ensure that it won’t put you at a huge loss in case your business doesn’t take off.
There are dozens of other ways to fund a small business, but these are the best options you can take when you don’t have any money. If these funding options are too risky or infeasible for you, it might be better to wait until you have saved enough money to start your business. After all, having your own capital is the best way to start.