Every business owner has at one point or another wondered how to raise money for their business. This is understandably, a very common concern among business owners. It usually takes time before the business can generate cash on its own, and before the business is able to have strong revenue streams, it requires funding from some source.
In this article we will go over 7 different broad ways you can raise money for your business. If you have not started your business and just have an idea, here is an article about fundraising at the idea stage of a business.
Fundraising With Grants
There are many grants available to entrepreneurs, but it is not easy to get a grant simply because there are so many other entrepreneurs who would also like to get a grant. Nevertheless, there are many resources available to people for getting grants. Some of them are grants.gov, sba.gov, usda.gov , commerce.gov, cfda.gov and local city and state sites. There are many local (city and state) grants that may be available so you should inquire with the Secretary of State office for your state, and your local city hall. Here is an article answering the question of whether it is difficult to get business grants. And here is a tutorial on how to get business grants.
Fundraising With Loans
Banks typically only lend to established businesses which have been in business for two years and are generating thousands of dollars in monthly revenue. If your business is an earlier stage business, you may be able to get loans for amounts under $100,000 from companies like Lendio, Prosper, Kiva and LendingClub. Here is an article on whether it is a good idea to get a loan to start a business. And in case you have bad credit, here is an article examining how to get a business loan with bad credit, and whether you should try to get a loan in that case.
Donations are available through crowd-funding platforms such as KickStarter or IndieGoGo. Crowd-funding is a way to raise money from a group of people by collecting small sums from each of those people, which will hopefully add up to a larger sum. It is a popular new technique to raise money that despite its growth is still not well understood in non-technology circles.
Fundraising By Approaching Investors
There are different kinds of investors for different types of businesses. For technology investors, take a look at AngelList. For other industries, locating an investor is trickier. For restaurants, you must find people who actively invest in those kinds of businesses, and for various other types of businesses, you must find people who actively invest in your niche. Here is a video tutorial answering the question of how to attract investors.
Creative fundraising techniques
There are many creative things you can do to raise money. For example, a few years ago, when I was working on comehike.com I funded that company by doing paid hikes. I led creative and themed hikes, and charged people to attend. That way I was able to put the money I made through leading the hikes towards developing the website and other initiatives. In fact, that fundraising technique turned out to also be a great marketing technique because those hikes eventually got so much attention.
Working As Fundraising
There is also the option of working an actual job. In fact it is one of the best ways to raise relatively small amounts of money for your business because it can be so predictable. If you seek money from investors, grants or donations, there is no guarantee that you will get any money. You are risking your time which could have been put towards building your business. On the other hand, if you are working and earning real money that can be saved towards your business, then you have a much more predictable and less risky roadmap for securing that money.
Money From Revenue As Fundraising
And of course, the best way to get money for your business is to earn that money through the revenues of your business. That way the time that you devote to raise money for your business is also the time that you invest in growing your business. Also, having revenue from your business is what will get your business to be stable on its own without needing outside help.
Create A Fundraising Plan
As you can see, there are many things you can do to raise money and it is easy to get lost in the different fundraising ideas. Here is how you can create a fundraising plan to help you stay organized in your business.
Additionally, as you are fundraising, you should understand how much money you need to raise. Here is a tutorial to understand how much money you should try to raise.
How Much Money To Raise
Before you start raising money, you need to understand how much money you will need to raise. Creating a fundraising plan can help you understand how much money you need to raise. Here is a tutorial on how to know much money you need to raise.
And here is a tutorial on how to create a cash flow statement and why it is needed.
Further Fundraising Resources
For more business-starting resources, please take a look at our business planning mobile apps. Here is the iOS business plan app and here is the Android business plan app. Additionally, here is the iOS fundraising app. And here is the Android fundraising app. And here are our business apps on the Kindle. And here is an article where I give the argument that our Android apps are the best business apps on Android.
And please check out and subscribe to my YouTube channel where we cover many marketing topics.
Author: Alex Genadinik