Most times, the common complaint with people who have ideas is the problem of finances. Most peoples’ dreams eventually die because they are waiting for and expecting one big money to land on their laps so that they can pursue their passions- that only happens in movies.
There are numerous ways by which you can raise funds for your business, if you are hungry enough to pursue it. But firstly, you need to have a plan; the month of April will be dedicated to developing a business plan.
I call this self financing as a way to raising funds for your business on the premise that you understand you are different from the business. What happens when you bring money out of your savings or save money towards starting your business is that you are borrowing the business some money or investing in the business to start.
To self finance, you could determine when you want to leave paid employment, or when you want to start and then begin to save gradually towards it. Self financing is the most common methods, but then lots of people get into trouble when using this system because the feel they own the business and the money and as soon as the first signs of money begins to roll in, they eat it up. But it remains the safest method.
INVESTMENT: sales & liabilities
This is like the first where you sell what you have to secure what you want to achieve. There are times when money may not be available but we have investments or liabilities stored somewhere. If you are truly passionate about your dreams, one of the things that will test your commitment is what you are willing to give up for it. I know people who went into businesses and gave up cars, lands, which could be an asset or a liability depending on the expense and cost. But if you see farther ahead of the present assets and enjoyment, nothing will be too small to give up for the business.
This occurs when you usually realize the dream may be bigger than your funding which is usually the case. But then a note of warning; sharing your idea exposes it to duplication or poaching, but then if you want your vision to grow, you’ve got to share it. Partnership is the coming together under agreed terms on the various issues; roles and functions, funding and profit sharing.
When your dream is bigger than you, or your interests, partnership might be the next thing on your mind. You might want to engage the services of a stronger company, or some one with a lot more cash than you presently have.
But then like I said, be careful of sharing your ideas with poachers, in further editions we will be discussing protecting your intellectual property.
FRIENDS & FAMILY:
Another avenue is to leverage on family leanings and relationships to develop the amount you need to start your business. This is using other people’s money (OPM) to finance your ideas. There are friends and family members who have the cash you need to start your business. if your plan is convincing enough, and very viable, it is sure to receive the amount of resources needed.
HIGH NET WORTH INDIVIDUALS
This is using other people’s money (OPM) to finance your ideas. There are high net worth individuals who have the money and are looking for people who have ideas and need funding. These people are willing to look at your ideas and help you fund it, some may seek to partner with you on the business, while some have funding companies as part of their own ways to giving back to their communities.
This includes investment banks, venture capital companies, SME funding organizations and Microfinance Institutions. There are numerous institutions, even supported by the Federal Government that have been empowered to support growing businesses at reasonable interest rates that even banks will naturally not want to provide. There are lists of microfinance banks and SME companies on the internet and in the press.