You have your business plan ready, you’re in the initial stages of your business, and you’re positive your idea will be the next unicorn start-up. The only problem is that you don’t know how to get funding.
There are many ways to get funding for your business. You don’t always have to resort to draining your bank account or asking financial help from family and friends to start or grow a company.
Here are some of the most common ways to raise money for your business:
1.Business Loan
One of the most popular and traditional approaches to get funding is by applying for a bank loan. Banks like Commonwealth Bank and ANZ offer low-interest rates and low or no security loans for start-ups and entrepreneurs.
2.Venture Capitalists (VCs)
A venture capitalist is a group of investors with high net worth. Typically, VCs are more interested in start-ups that are already profitable and are planning to expand. However, with the right business plan and pitch, it’s not uncommon for some VCs to take on new businesses and be active in growing the company.
3.Angel Investors
These are high net worth individuals that are ready to fund start-ups in exchange for ownership in the company or convertible debt. In the initial stages of the company, these investors are often there to provide support to get the business rolling.
4.Accelerators and Incubators
Incubators or accelerators are organisations that provide workspaces, training, business advice, and funding for the right start-up. They are usually sponsored by companies, universities, or major industry organisations.
5.Crowdfunding
In the past years, crowdfunding has become popular among start-ups — especially among businesses that offer product innovations. You get funding by providing incentives to those interested to give a monetary contribution to your business. Unlike other types of funding, contributors don’t get a stake in your company.
6.Small Business Government Grants
Did you know that you could apply for government grants to start or expand your small business? business.gov.au, for example, is a searchable, online directory of Australian grant programs.
In some places, you could apply for a small business grant that would allow you to hire new employees. It’s an excellent opportunity to develop your dream team that would help you lay the foundations of your company.
With many options available for entrepreneurs, it could be a bit confusing determining the best financial resource for your business. We could assess your finance requirements and offer recommendations on the most suitable funding option.