Do you have the business idea but you lack funds? Here are the things that

you can do in order to raise the fund you needed to start up with your business.

A start-up fund or starting capital is one of the most important components in starting up a business. Oftentimes, great ideas failed to materialize due to lack of funds or inability to find an institution which could provide help. It is a common knowledge that even how small or big our business, we still need to spend especially for the startup and working capital.

One of the best strategies that we may be able to adopt is "to start small". Meaning, we can start a business depending on how much available fund we have. This way, we could refrain from borrowing funds and we can just maximize the use of our current funds. The profit we earned will then be added to the current capitalization, thus we are growing the business on its own.

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However, this strategy may only be applicable to some business models such as buy-and-sell business, wherein you need to buy the product and you can automatically use the money after you sold the items/goods.

HOW TO RAISE FUNDS FOR START UP BUSSINESSES

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For some business models, it may not be possible especially if we need pieces of equipment and buildings before we could start our business. For these types of business model, we can possibly adopt the following actions in order to raise the needed capital funds.

Raising Capital From Family and Friends

Analysing and presenting a well-thought-of business plan to family and friends will certainly help us in raising the needed fund for a business. Most people are looking for something they can put their extra funds without having to participate in the management.

There are also some individuals who want to have participation in running the business. Before presenting the business idea, we

must be ready with a detailed business design in order to convince our family and friends to share fund. This should include information such as, how much they will gain, how profitable is the business, how long will they be able to recover their investment and other matters including risks.

• You should be ready even with the small details and everything should be in writing in order to avoid future problems and misunderstandings. Moreover, let us remember that before we approach other people, our family, and friends might just be there and only waiting for you to offer them the business proposal.

Crowdfunding

Crowdfunding generally refers to a method of fundraising whereby money

is sourced from a large number of individuals usually through an online platform.

Crowdfunding is an online platform that serves as a middleman between the project initiator and the capitalist. These platforms served as a meeting ground for presenting creative ideas with the purpose of generating fund and the investors who are willing to support the ideas. Generally, the platform has three parties involved; the owners of the online platform, the businessmen providing funds and the individuals with the business proposal.

• The project initiator would present the business idea through the platform and the investor would choose from among the presented proposals. Everything will be done through the use of the online platform.

Angel Investors

Angel investors are wealthy people who invest in an upcoming and young bussisness in exchange for an equity or capital or shares in the company.

This could be done through shares or stocks. Angel Investors may have direct

control over the business depending on the number of shares they owned.

• Angel investors may also be a part of an online platform. But unlike the crowdfunding platforms which the project initiator would present a business idea, it is the other way around with the angel investors platforms. Here, the businessmen are the one to post their intention to provide the fund for qualified recipients.

Here are some sites you could find them

• Manila Angel Investors
• Angel Investments

MicroFinance

Microfinancing is another method of obtaining fund to support our business goals. This is a way of providing funds for business purposes to poor individuals who have no access to bank

services. In most instances, microfinance is being offered to a group of individuals making a loan with shared responsibility. Meaning, every member of the group has a responsibility to ensure that other members are complying with the agreement as set forth in the contract.

The goal of this project is to extend help to small-scale businesses by providing an additional capital funding for startups or business expansions for a lower interest.

• Currently, there are nearly a hundreds of registered microfinancing entities in the Nigeria.

Government Programs That Offer Start Up Capital

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There are different government institutions that are offering various programs to address the current needs of individuals in terms of capital funding requirements of their business. the Department of Trade and Industry is the main agency that provides technical assistance in relation to business regulations and other matters related to business.

Though they may not be able to provide direct funds since their main concern is the welfare of the consumers, we can approach them for technical assistance and information on how to secure fundings from other institutions.

On A Final Note

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Starting a business requires an excellent idea backed up with a well-written business plan. Saving the needed amount for our business start-up is still the best way to start a business. Though, in the absence of such, getting the help of the right company or people would also be helpful.

Thank you for reading. I hope this post provided the necessary information you need in your business endeavor.