Ask 10 people about their plans in life. A significant proportion of those you ask will answer that they wish to have their own businesses.
One of the biggest challenges of running a business is inadequate capital or funding. A lot of businesses have crumbled because the owners do not have funds for the day to day operations.
Effective ways to raise capital for your business
Below are some of the ways you can raise funds for your business:
Most people start their businesses with their own personal savings. You can use your savings from your present work or any investments you have to run your business.
Family and friends
Family and friends can also help out when you are starting out in business. Just ask the trusted members of your family and friends and you may be surprised that some of them may offer assistance.
I know a lot of people who started their businesses by raising capital from their family members and friends.
High interest bank loans are not advised for business startups. If you are convinced that your business would be able to pay back the bank loan, you may proceed to ask your bankers about the loan.
Banks will run a credit check on you to see if you are suitable for a bank loan.
Credit purchases can help your business reduce cash outflow. If you won a business, you can buy some assets needed on credit. You can also defer payments to your service providers and consultants.
Your banks can allow you to overdraw your accounts if you have good standing with them. Overdraft is a way you can cash out more funds than what is in your bank account.
For example, if you have $10,000 in your bank account, your bank can give you an overdraft facility of $20,000.
Government institutions and some Non-Governmental Organisations (NGOs) give grants to businesses. The ministry of agriculture in your country can decide to give grants to young people who are engaged in agribusiness.
A business owner can also ask investors to bring funds into a business in exchange for equity holdings or shares. This means that a business owner will give out part of his ownership rights for investment in his business.
Some of the reasons why people start a business include the following:
People are of the opinion that if your business booms, you can secure your job as the owner for a long time if not for a lifetime.
You can be fired anytime if you work for people.
The level of income you can earn as an employee is capped. As a business owner, your income is uncapped. You can make very good income so far your business is profitable.
Ability to choose your working hours
Working for yourself will enable you to choose your working hours. You are your own boss so you can decide to run your business anytime you want.
An employer in most cases will dictate the time you have to work and you must abide by it.
Recognition and Pride
There is a limit to how you can shine and bet recognized as an employee. If you run your own business, you have the capacity to make people recognize your efforts without any hindrance. Business owners do not work under the shadows of their bosses, so they can claim any accolade or recognition they deserve.
A friend who helped his employer to win several international awards was not recognized at all. Instead, his employers took all the glory and even recognized his line managers who did not contribute anything to the process of getting the award.
Are you a business owner? If yes, you can get funding from your business from a lot of ways. Let us know your funding challenges and we may be able to provide assistance.