10 Ways To Raise Capital For Your Business
How do you raise the start-up capital for your business? This question is probably the biggest problem faced by those who want to become an entrepreneur. Personally, I’ve heard friends say that if only they had enough capital, they would really quit their jobs and put up their own businesses. Admittedly, I was also burdened by this obstacle years ago when I was still working as an employee. Through the years and five businesses later, I’ve found out that there are actually many ways to do this. Some are easy and some are not. Some are quite obvious while some takes a little creativity and a bit of due diligence to make it work. So if you’ve always wished that you had enough funds to start your own business venture, then I hope that these ten ways can help you raise the capital you need to become an entrepreneur.
1. Your Own Savings The most obvious way to get your start-up capital is to save money. Be frugal, live below your means and pay yourself first. The advantage of this method is that if your business fails, then you owe nothing to anybody and you have no financial burdens to worry about. However, although this may seem ideal to some, it could take a long time before you finally have enough money saved to start. Recommended for those who are not in a hurry to start a business and those with very low risk tolerance. If you plan to do it this way, then please check out some of the money saving tips I’ve written. 2. Liquidate Assets Aside from digging into your savings account, you can also sell some of your assets. My father’s friend sold their old family car to put up a small photocopying center. Depending on the amount of capital you need, you could simply look around the house and sell whatever you have such as those tech gadgets, your jewelries and even some of your furniture or appliances. If you have portfolio investments, you can ask your broker if you can liquidate some of your paper assets or withdraw from your mutual fund or time deposits. 3. Work For Extra Income We often look for ways to earn extra income only when we are in financial need. What many people don’t realize is that, finding a second job or working on a sideline is a great way to raise capital for your dream business. Assuming that your current employment can cover all your financial requirements, then the profits from your extra ventures can all go straight to your start-up funds. Going this route can be time consuming and exhausting but it’s relatively faster than just doing the two previous methods.
4. Take Out A Personal Loan A personal loan is something you can leverage on especially if you are employed. Depending on your credit history and employment status, some banks and almost all credit card companies are willing to offer these types of loan without much hassle and without collateral. Additionally, these salary loans are available in the Philippines through the Government Service Insurance System (GSIS) and Social Security System (SSS).
Be ready to give them a good business plan and a collateral for the loan.
. Although the interests are much higher than personal loans.. Remember though that if you go for this method. it is still a good option for short-term business cashflow needs and small business capital requirements. First is to remember your cut-off date and do your purchases right after so you’ll have more time to save up. For example. The link to the second and last part of this article is provided below. Again. Rates and length of payment dates vary for different lenders. 5. Apply For A Bank Loan Bank loans are also a viable option to raise capital for your business. Bank of the Philippine Islands (BPI). since you’ll be paying around 3. you are putting your reputation on the line. You can inquire from Philippine government agencies such as the Department of Trade and Industry (DTI). You can prepare frozen assets for selling or ask friends if they could help just in case the worst happens. give back a little extra as gratitude for their trust.000 if you issue a check worth P20. One great advantage of doing this is that most of them are usually willing to lend you money without or very little interest. So do your best to pay on time and if your business earned more income than expected. It’s also good practice to have backup plans just in case you don’t earn enough money to cover the check amount. Second is to remember your due date.000 in a couple of years – which is usually high enough to leverage on and start a business with. Ask your bank if they offer business loans.
8.Microfinance institutions can also provide non-collateral personal loans to those who can present to them a sound business plan. 7. Check Rediscounting Lenders that offer check rediscounting are not difficult to find. your credit limit could go as high as P250. the financial strength of banking institutions allows them to provide you with a larger loan amount for your medium scale business ventures. you’ll receive P19. And lastly. This method requires you to issue post-dated checks in exchange for its amount in cash less the interest. you might forget to pay your bills. at 5% interest.
Here now are five more ways you can raise startup funds for your business. Avail a cash advance or make the necessary purchases for your startup venture. having a thorough business plan plays an important role in this situation. A few reminders if you plan to do this method.000. Development Bank of the Philippines (DBP) and Land Bank of the Philippines. A brief research shows that some of the SME-friendly banks in the Philippines are Planters Development Bank. When you become so busy and engaged with your business. Again. it’s essential that your business generates enough income to cover for the payments and these charges. There are five more ways to raise capital for your business. 6. Borrow Money From Family and Friends Another good option to raise capital for your business is to borrow money from family and friends. You can also enjoy more flexibility on your payment terms. Use Credit Cards Credit cards can easily be used to gain some business capital. make sure that you’ll be able to generate enough money to clear the check on time. If you always pay your credit card bills in full every month. Although less advantageous than using credit cards. Small Business Corp (SBC) and the National Anti-Poverty Commission (NAPC) about these micro-financiers.5% interest per month on your credit balance.
be sure to clearly define the responsibilities. many friendships have also been strained when things go wrong or become difficult. You can also seek them out in online forums and websites such as the Brain Gain Network (BGN). There are actually ventures that succeed faster through partnerships.
. That’s it! I hope I was able to help and give you an idea on how you can raise capital for your business. 9. one partner can have good accounting skills. It will help you ensure that your business will be able to pay your creditors on time and more importantly. Lastly. Occasional help and a few suggestions can be entertained but draw the line and state that executive decisions will solely come from you. do remember that most likely. remember that whichever way you choose among these ten. Lastly. However. Also. If you know any other method. you’ll lose free rein over running your business because certain decisions will need to be consulted to the VC before they can be implemented. Do it professionally and present to them a business plan. Some people might think that just because they lent you money for the startup. boundaries and jurisdiction of each partner in the business. It’s important that from the very start. write everything on paper including the options and terms if ever one partner chooses to leave the business. be straightforward and honest with your intentions. while another is proficient in sales and marketing and one is a legal expert. Unfortunately. do share them below as a comment. Lastly. Always have an elevator pitch ready just in case you bump into one. One major advantage of doing this is that you could further tap the VC’s extensive network of partners to help enhance your business. having a good business plan is always an essential tool. It’s very common nowadays for friends to pool their money and resources to put up a business. convince investors to join your venture. where Filipino VC’s and technopreneurs are some of the active members. 10. they instantly become investors and can actively participate in the business. you can also consider making them a real part of the business. For example. Make a team whose strengths and expertise complement each other. Furthermore.When talking to them. Looking for a venture capitalist can be quite difficult in the Philippines but they do exist. These are people or companies who are willing to pay for your startup in exchange for part ownership or royalty fees from your business. be clear that you’re merely borrowing money from them and they will not legally own part of the business. Guy Kawasaki is an example of such people. each one understands the amount of work that needs to be done and is willing to go the extra mile to make the business successful. Seek A Venture Capitalist Venture capitalists are also called angel investors. produce a contract stating the agreed terms between you and your friend. Form A Joint Venture Instead of borrowing money from family and friends.
Make several layouts and decide which one would looks best. Is it to announce your opening. Ask the opinion of family and friends about it and adjust or tweak accordingly. If your design is simple enough and monochromatic. Contact your printer and proof read the flyer before making the whole batch. what do you want people to do after they read your flyer? Visit your website? Call your number? Go to your shop? Get a piece of paper and make a sketch of your flyer. Make sure that it contains the three elements above – the attention getter. 7.
6. Why would people bother to go to your business? What problem does your business answer? What desire does your business fulfill? The answers to these questions will identify your selling proposition. 2. risograph printing is usually the most economical. 4.How To Design An Effective Business Flyer
1. Finalize on the layout and design and print a sample. Decide what will be the purpose of your flyer.
3. Your coffee shop is having a cake sale? Then perhaps consider using a baby eating a huge slice of cake to get the attention of people towards your flyer. State a call to action.
. a special promo or just a simple advertisement for your business? Identify images and words related to that purpose and select which one will catch the attention of your target market. Simply put. the selling proposition and the call to action. 5.