In the modern age, the desire to dive into entrepreneurship and build something successful from nothing has exploded. With a solid business plan,something to sell, and quality management, people of every kind can become business owners. Managing your own hours, working with people personally, and making money from your passions are all very appealing attributes of a small business that drive people towards the venture.
However, the process to reaching this dream is a bit more complicated than that. Starting up a business is expensive, whether you are managing a brick and mortar store or an online business. Buying the equipment, creating the products, hiring employees, or even just paying your rent until you experience a return in profit quickly stacks up the costs. But there’s no need to worry – where there’s a will, there’s a way. Or more specifically, where there’s a loan, there is a way.
Borrowing money from others in order to see a return on your investment is the solution for you. But where do you get this money? Here are three very simple ways to get a loan for your small business.
The most favored option out of the lineup is asking a bank for a loan. Most prefer this method because banks are used for a range of loans, not just small businesses, and have created a reputation for being reliable, flexible, and dependable. They also boast of having the smallest interest rate available, allowing you to enjoy the fruits of your business labor rather than pay them back to Scrooge McDuck. How do you go about it?
- Develop a Business Plan
Since you are presenting your business as an investment option to professionals, it’s important that your business looks professional. These people are trusting you not to go belly-up and flush all their money down the drain, so having a comprehensive and detailed business plan on why your idea will be successful, make money, and continue to thrive is vital. There are many online resources available on how to create one, and several professionals willing to help you with the process for a relatively low fee. By creating a detailed forecast on where your business is going, what your goals are, and how you intend on achieving them, you will instill a sense of confidence in your investors, making them more willing to take a chance on you.
- Approach Several Banks
Each bank will be employed by unique people who are willing to take unique risks, so even if you are rejected by one bank, it doesn’t mean you’ll be rejected by all of them. Most small business owners recommend contacting nine or ten different banks and presenting your business plan to each, detailing the highlights you offer. While most of them may be uninspired by what you have to offer, it’s likely that at least one will be willing to fund your efforts. Additionally, contacting multiple banks will serve as a learning experience for interacting with different audiences that possess different traits, boosting your skills in interacting with future customers.
If you want to go with a more freelance method, there are ways to gain funding outside of traditional loans.
While the old saying indicates it’s not wise to do business with friends, professionals may look at it more critically and without the same level of hopefulness you possess. You have greater chances of convincing your friends why your business is such a valuable and profitable idea in contrast, as they likely share your passions. If you have several friends who are willing to invest, or perhaps one particularly wealthy friend who will take a chance on you, it could be the extra push your business needs to blossom into something greater.
There are many online crowd-funding websites, but Kickstarter is the most well-known for its abilities to get the public excited enough about a project to donate towards its journey to success. By utilizing these crowd-funding websites, you can present your business plan and how it is unique to a large crowd of people, encouraging them to invest towards getting your business off the ground. This not only generates an audience that will then contribute to your long-term profits, but it’s a fast and effective way to gain funding without interest. However, these projects only offer money once the business has been started, making it difficult if you need money to begin with.
- Fellow Entrepreneurs
Contacting fellow business-owners in fields that are complimentary to yours offers a nice balance between crowd-funding, bank loans, and friendly investment. If you are opening a café, for example, contacting a pastry business for investment can benefit both parties by creating a collaborative process – you buy their products and they invest into the success of your business. Additionally, as people who have gone through the same struggle you face, they may be more willing to give you a helping hand over a bank, all while maintaining the objective mindset your friends may lack.
Small Business Administration Loans
The Small Business Administration is an excellent choice, as it will offer you suggestions on which banks to contact for a loan or other methods available to you for procuring funding. This creates a peace of mind, as they will only recommend banks that have a reliable work ethic and history, with interest loans that will suit your particular venture.
There are many levels to creating a small business, all of which can be rewarding and frustrating. The most difficult of all is locating the funding to get off the ground and to ensure you don’t close down after a few years; but don’t let that discourage you, because it is possible. By discovering the proper people, places, and businesses to contact to secure a loan, you can equip yourself with all the funding needed to ensure your business not only begins, but thrives.