Get Your Business Funded: Creative Methods For ... _VERIFIED_
Step 1: Decide whether you want to pursue a startup competition or a small business grant. You can find out about startup competitions in our guide and search federal grants here. Do some research to see which competitions or grants fit well with your business.
Get Your Business Funded: Creative Methods for ...
Your friends and family have a vested, personal interest in watching you succeed. This might make them more willing to invest in your business, especially in the beginning. Taking money from friends and family, however, can be tricky, and all of the pros and cons should be scrutinized before deciding to use this method to generate funds.
If your business is based purely on the selling of a single product, the easiest way to raise the money to produce the product may be to pre-sell it. By pre-selling your products, you can be sure not to make too many and have a warehouse of unsold goods. It also keeps you aware that there are consumers relying on you to follow through.
Using alternative lenders might require more due diligence on your part because you want to be sure you are doing business with a legitimate vendor. In most cases, however, these lenders fall just outside of the category of banks or government institutions.
On top of that, you need to make sure your finances are stable before reaching out for funding. Creating financial reports that show your business is on the right path is a must-have in order to convince a lender or investor to infuse capital into your business.
Whether gathering in person or online, a cooking class is a great way to interact with your community in a relaxed, creative environment. Ask your employees, volunteers, or donors if anyone would be interested in leading the class, or turn to the experts and hire a chef to take the lead.
Strike a deal with a local restaurant, spa, or hotel to offer an exclusive date night prize to the winner of your fundraising auction. Identify potential businesses in your area that donors have shown an interest in and highlight the incredible marketing opportunity those establishments will receive from this event.
Entice bids by promoting your auction online, and get creative with your marketing materials. Sell the experience with strong photos and videos of the vacation package, plus a comprehensive list of the vacation details and perks the winner will receive.
Wine and dine your community of supporters with an invitation to a wine night fundraising event. Ask local wineries or restaurants to donate a bottle or two in exchange for free marketing, or host your wine tasting at a local business that would contribute a portion of their proceeds to your organization.
If you decide to go with an in-person gathering, consider asking if the venue would share a portion of their food and drink proceeds with your nonprofit. Nothing encourages business like being a socially responsible company.
Either set a theme for the contest, like sunsets or photos of nature, or keep it broad enough for participants to get creative. Ask each person to submit their photos to your team directly, then publish them to your event landing page where people can vote for their favorite through small donations.
Secure a venue, recruit your talent for the evening, and prepare attendees for a fundraising event to remember. Research some free community spaces to rent, or consider striking a deal with a local business to host your event for a portion of the proceeds.
Although most commonly held at a track, you can take this event to a local park or even online to host a virtual walk-a-thon. Consider tapping on event sponsors to support your event, or think about creative ways to collect in-kind donations from your community to keep walkers fueled throughout the day, like drinks, snacks, and sunscreen.
This fundraising event idea is perfect for families and children. Ask your community and local businesses to donate supplies and help you get the word out. Charge per scoop or set a flat ticket fee for an all-you-can-eat option.
Bootstrapping is essentially self-financing. You, as the business owner, are utilizing everything you currently have available to fund your company. This typically means depleting your personal savings account and possibly cashing in your retirement accounts in order to finance your venture.
Credit cards are almost always the first form of debt you will be able to qualify for. If you have even average credit then you could get access to these revolving lines of credit to help cover the costs of business expenses as they pop up. When your business starts to get income for a few months then your business could qualify for credit lines that may be larger than what you can qualify for personally.
Taking your company public is often a goal of businesses that scale quickly. This means allowing your business to sell ownership shares on the open market. Some businesses use this as a tool to take money out of the company while others do this as a way to raise funds to grow faster. You can raise millions of dollars if your company is large enough.
While this option used to only be available for large corporations, small businesses can now raise money through the sale of company stock. In 2012, Congress passed a bill known as the JOBS Act or the CROWDFUND Act, which enables small businesses to use crowdfunding to issue securities. This makes it possible to raise smaller amounts of cash without having to take your business public.
Similar to crowdfunding, peer-to-peer lending leverages the power of the internet once again to secure funding. The idea behind this method is to use a group of similar-minded entrepreneurs to contribute small amounts to your business, often through a network such as Upstart (recommended for those with limited credit history) and Funding Circle (designed for small businesses).
One alternative to get around the seasoned funds requirement when you know your going to buy a house is to move the money from your business accounts into your personal accounts at least 3 months before applying for your mortgage. That way you get around seasoned funds requirements because the money will already be in your accounts in the two months of required bank statements.
Money is not the only thing you must think about when opening a dispensary, as the laws and regulations are still very complex in the cannabis industry. First, you must check the legal requirements in the area where you are looking to start your business and ensure you comply with state and local laws.
Next, you should obtain the licenses you need to operate a cannabis dispensary business in your state. Also, you should find an insurer who works with cannabis companies to get the right insurance policies for your business.
You might need to relocate to a different state, maybe somewhere where the costs of living and real estate are higher than what you are used to. If so, you may need to take out a real estate loan. You can use the funds to finance the purchase or improvement of commercial real estate and adapt it to your business needs.
If this is your first entrepreneurial endeavor, you should consider partnering with companies that provide cannabis banking solutions and bridge the gap between banks and founders. Companies like Safe Harbor, Green Check, or Abaca provide banking solutions as well as the necessary support and expertise to help cannabis businesses navigate the lending process better.
Smaller banks may have the experience of working with other businesses in the cannabis industry, or they may be willing to work with you because of your personal relationship. Either way, having a bank backing up your dispensary business could be a good solution for you.
Given the specific circumstances surrounding the cannabis industry, chances are that the loan terms might not be as favorable as they would be for a less-risky business, but they should still be affordable. Compare interest rates, approval time frames, and down payment amounts to find the best option for your company.
These firms, like traditional banks, typically make profits by financing debt. They charge interest rates on your loan, similar to regular banks. While rates are greater than in other retail industries, they provide an appealing alternative to other investment choices that need giving away equity in order to raise money to start your business.
Venture capitalists are firms or funds that invest in early-stage or growing startup companies. They often invest larger sums of money than angel investors and may be more interested in a hands-on role in the company. They also demand equity in your venture in return for funds and access to their business connections.
If you decide to seek venture capital financing for your dispensary, you should note that you may need to purchase dispensary insurance for your business. Venture capitalists typically require that their portfolio companies carry adequate insurance because they want to protect their interests.
If you qualify for a social equity lending program in a state where cannabis is not illegal, you can apply for a loan that could help you open your dispensary. At the same time, you would be a part of an effort to rectify injustices in the cannabis business ecosystem.
If you would prefer to partner with family members or friends when starting your dispensary, then presenting your business plan to them and asking if they would be willing to invest in it might be a good option for you. Remember that these people believe in you on a personal level, not just business, and they want you to succeed.
Crowdfunding is a way to raise money from a large number of people. You can create a campaign on a crowdfunding platform, and people can contribute money to your dispensary. In return, you may offer rewards, such as merchandise or shares in the business.
The more business results you have, the easier it is for investors to give you funds to grow your business. So if you're just starting, I'd advise you to build your product and sell it. For those who have just started selling a software-as-a-service (SaaS) product, consider consulting as an alternative business model to raise funds to improve your product. Don't hop on the fundraising train before having a decent product with proof that people want to buy it. And finally, remember that as a CEO you're the chief builder and seller in your company. You sell your products and services to your customers. You sell your company vision to your employees, and you sell passion, riches and self-importance to your investors. - Samuel Thimothy, OneIMS 041b061a72