For most business owners, not knowing how to raise capital for a business has been the primary challenge. About 9 out of 10 of them fall into this category.
Even though money doesn’t grow on trees, there are a number of radical ways to obtain finance for your business.
These ways to raise capital are frequently ignored or unknown by entrepreneurs and business owners. However, they are more efficient and frequently simpler to use than the more conventional approaches, such as getting a loan or looking for venture capitalists.
Let’s take a look at 5 radical ways to raise capital for your business.
#1 Radical way to raise capital for your business: Business grants
Governmental and non-governmental organisations give free money to enterprises as investments in their operations.
Additionally, the awarding organisation frequently provides mentoring and training programs to assist the business in growing and maximising capital.
These programs offer awards that range in value from a few thousand dollars to several thousand dollars. And you are not required to return the funds.
Each year, grants are awarded to thousands of businesses to help them finance operations. There are usually a lot of individuals applying for these grants, making it quite competitive, just like with any free thing.
To maximise your chances of being chosen, you must make your application stand out. The grant application procedure can teach you anything about your company. Therefore, even if you are not chosen, you can still benefit from the experience.
#2 Radical way to raise capital for your business: Bootstrap your business
Self-funding, commonly referred to as bootstrapping, is the act of starting and expanding a firm using resources that already exist.
The founder starts the business with personal savings, equipment, and space and then reinvests profits to expand it. This strategy contrasts with the popular ideas of borrowing money to finance a business expansion or finding investors to provide financing. It involves making use of whatever resources you have to complete the task.
The benefit is that you retain total control over the business, free from interference from creditors and investors, and that managing scarce resources can spark innovative approaches to making do with little.
Confidence, a willingness to take risks, and self-control are necessary for someone to start a business from nothing and grow it into a successful enterprise.
#3 Radical way to raise capital for your business: Pre-orders
You can modify this strategy by offering your goods for sale online. Make them pay so it can be provided at a time that is reasonable. This strategy can be used by local food sellers, makers of handcrafted goods and service-based enterprises to generate money before producing their actual goods.
Online course makers can also use this strategy to secure paid enrollment for the initial rollout of their training program before moving forward with course development once classes have begun.
Selling your products before they are on sale is sometimes overlooked, yet is an extremely powerful strategy to raise the funds required for financing your company. But not every business model will be compatible with this approach.
#4 Radical way to raise capital for your business: Competitions
One of the most underused but efficient ways to collect free money for projects and enterprises is through competitions and challenges.
There are several challenges that give cash prizes ranging from $5,000 to $100,000, but some of the biggest ones offer up to a million dollars.
You can win cash awards as well as high-value publicity and prospective business partnerships to help start your venture. If you haven’t thought about it, you ought to attempt it.
#5 Radical way to raise capital for your business: Crowdfunding
One of the fundraising breakthroughs that technology has popularised and made simple is crowdsourcing.
This is how crowdfunding operates: An entrepreneur posts a thorough description of his company on a crowdfunding platform. He includes the company’s objectives, strategies for turning a profit, the amount of funding he needs and why, etc. Consumers can read about the company and donate money if they like the concept.
People who donate money will make online promises to do one of two things: pre-purchase the item or make a donation. Anyone who wants to support a company they strongly believe in can donate money to do so.