RAISING START-UP CAPITAL/FUND
No matter what the economic situation, someone somewhere, eyes bright with potential, is looking to start a new business. Funds are often the biggest hurdle to what could otherwise be a lucrative opportunity. Here are some ways - traditional and/ or creative - to raise money for your start up business.
Ways to Raise Start-up Money
1. Personal savings . There's nothing like having your own money saved, to put into your start-up. You have the satisfaction of having saved it on your own, and the knowledge that you don't owe anyone.
2. Partner savings. Having a partner helps spread out not only the business management but the financial burden. A good partnership is also synergetic, bringing more success than running a business alone.
Risk : A fed up partner who wants out; arguments; irresponsible partners who leave you with all the debt; broken friendships.
3. Sell your stuff . Sell anything you haven't used in a year or longer. The same goes for leased items.
Risk : Regrets, or worse: going out and spending to replace the item(s) you sold.
4. Windfalls . Invest any tax refunds, gifts, lottery winnings into your business.
Risk : Getting hooked on lotteries and gambling to "fund" your dream business.
5. Blood money . Borrow from family, friends, colleagues, or employees . An alternative to this is to have one of the aforementioned co-sign a bank loan for you.
Risk : Meddling lenders, constantly reminding you of what they gave you; ruined friendships.
6. Get a bank loan. If you have a solid business plan and the lender agrees, this can often be the cheapest (interest rate-wise) loan sources available.
Risk : Besides the fact that it's often hard for a startup to qualify - since there's little evidence you'll be profitable - if you do get a loan, it can be like a ticking time bomb if your business isn't doing well.
7. Private offering. Turn your blood money lenders into part owners, so that they have an emotionally vested stake in seeing your business succeed.
Risk : You might lose partial control of the business, and if you have to have meetings to make simple decisions, that could hinder your ability to work effectively.
8. Consignment. This isn't so much as a fund source as it is a source of product to earn revenue and then pay "suppliers" after their products sell. Small boutique shops often take this approach, thereby reducing their operating costs to rent, electricity, phone and few other items. Stock costs drop potentially to nil.
Risk : If you're not disciplined enough to sell the product, product takes up space and suppliers get upset.
9. Freelancing or contracting . You may not be able to hold down a regular job while also running a start-up, but part-time freelancing or contract might be an option for producing extra income.
Risk : Time spent freelancing or contracting is time that you cannot spend on your start-up.
EXPENDING
- Transform your mindset – If you were rich, what would you do with your money? The answer to this question will determine how much money you will have in the end.
- Boost your financial IQ by learning from anything and anybody related to managing your money.
- Start investing a small percentage of your income to build your asset and increase this percentage to the highest possible over time.
THE EXPENDING PARADIGM
To expend means to simply use up for specific purpose. To be financially independent or to live in absolute financial freedom one has to learn to use his/her resources to meet and satisfy specific need. The truth is you can’t satisfy all your wants but I dare say, you can satisfy your needs. Many times we have resources but misuse our resources because we find it difficult knowing what need to meet given the amount of resources we have at our disposal.
Whether you are a business owner, an aspiring entrepreneur, you need to learn how to manage your finances, that is, using your money for specific purposes only which is what the expending paradigm is about.
1 Save before you spend
*Don't save what is left after spending; spend what is left after saving.
2 Don’t be an impulsive buyer.
*If you buy things you don't need, you'll soon sell things you need.
3 Don’t be a seasonal buyer
When you buy things during festive period you pay more than what it costs
4 Don’t buy a label but a shirt/dress
What you need is a shirt/dress and not a label, learn to avoiding buying designers because what they sell to you is their label/brand.
5 Spend within/below your means
Ascertain what you earn before you spend, i.e. have a consciousness of what you earn.
6 Delay every major buying
Delay every major expenses for at least 3 days.
7 Disassociate yourself from people that are extravagant spenders
Show me your friends and I will tell you who you, as long as you stay with extravagant spender you will start spending like them.
8 Make a budget
Learn to make weekly, monthly and even yearly budget, assign resources to specific needs. A Budget is a plan that outlines an organization's financial and operational goals. So a budget may be thought of as an action plan; planning a budget helps a business allocate resources, evaluate performance, and formulate plans.
While planning a budget can occur at any time, for many businesses, planning a budget is an annual task, where the past year's budget is reviewed and budget projections are made for the next three or even five years.
9 Draw/have a financial plan
A financial plan guides how you earn, spend and even save money. A proper meaning of the phrase separately and there common meaning needs to be understood carefully. Personal means somebody’s owned thing or a personal affair. Financial means the position of a person or a company in monetary terms. Planning means thinking of future. Now together Personal Financial Planning means thinking of future in monetary terms by a person for himself. personal financial planning refers to the making of plans or policies or decision or strategies that may affect the future in monetary terms or monetary position in comparison to present position by a person for him or his family.
10 Don’t spend to impress
If there’s one thing, just one thing that can pretty much kill any hope you have of a solid financial future, as well as any semblance of a healthy form of self esteem, it’s spending money to impress other people.
Deep down inside, we know it’s not prudent, yet most of us at the very least, feel the urge to do it and I’m not going to even discuss the various psychological reasons why people go on to actually do it. So how do you stop the urge of spending money to impress other people? Here’s the thing. If you’re ALREADY spending money to impress other people, it’s SO hard to stop.
To have a DEFINITE PURPOSE for your money that’s HIGHER than your need to impress other people based on your own personal values.
11 Question every high yield investment
12 Don’t spend with the hope of getting money
13 Look for alternatives
14 Pay yourself from your income
15 Pay your house rents monthly
16 Avoid loans that will not be used for investment
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