How to finance your private home enterprise without cost

Home business magazine online

By Steven Gallagher

When it comes to funding your business, you have many options including loans, credit cards, and crowdfunding platforms like Kickstarter and Indiegogo. However, if you’re looking to start your business from home, these options may not work as well for you. If you don’t have enough cash in the bank, interest on loans and purchases on your credit card will likely eat away at your profits from the start.

What is crowdfunding?

Crowdfunding is about raising money from large groups of people — usually through social media platforms like Facebook or Twitter. There are several ways you can raise money from a crowd: you can solicit donations, offer rewards in exchange for contributions, or sell shares in your company to investors. Crowdfunding is common on sites like Kickstarter and Indiegogo.

What you need to know about equity financing

For those of you who have tried unsuccessfully to get a bank loan or line of credit and are wondering where else to get financing, there is equity financing. This type of funding is available from private investors, angel investors and Venture capitalist. When looking at these funding sources, you need to understand exactly what each of them offers and what doesn’t. In some cases, equity financing can be a last resort, but it can be an extremely beneficial source of funding when done right.

Crowdfunding vs venture capital

Both crowdfunding and venture capital are options when it comes to financing your home business. The two forms of funding have different strengths that are useful in different situations. Crowdfunding is essentially asking a large group of people (the crowd) for money. Present a project on platforms such as Kickstarter or Indiegogo, e.g. a new product or campaign, and get people to contribute money (in exchange for perks like early access or samples). Crowdfunding can be great when you need small amounts of money from many investors – say if you are looking for $2,000 from 200 investors, but not so good when you need larger amounts.

Tips for a successful crowdfunding campaign

Before you start your crowdfunding campaign, keep in mind that crowdfunding sites like Kickstarter, Indiegogo, and GoFundMe do not offer guaranteed success. You need a compelling video that tells your story, an attractive page design, and great marketing skills to make it work. They also need patience: research shows that 50% of projects on these platforms fail to reach their goal; However, if you are able to secure funding through a site like this, it can be beneficial to start it. A successful crowdfunding campaign helps raise money, but it can also offer social proof and instant credibility to new customers and investors.

Conclusion

Getting a bank loan to fund your business is one of those things that many people will immediately say “no” to. There is no magic formula, but there are ways you can invest money in your home business without having to go through traditional channels.

Of course, if your business is well established and has a good reputation, there is nothing wrong with using traditional financing methods. It depends on what stage of the business you are in and how desperate (if any) you are feeling. If it doesn’t seem like an outside investor will be buying into your business anytime soon, consider alternative means such as crowdfunding sites or even nonprofit small business grants.

Author: Steven Gallagher – 1stUKmortgages.co.uk

Steven Gallagher was born in Switzerland and raised in Canada until he moved back to Switzerland and attended high school there. He studied economics at the University of Zurich. When he’s not writing, he’s hiking in nature or writing a diary in a café.

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