Anyone who started a business knows it takes a lot of hard work, dedication, and, most importantly, money. Before thinking about turning a profit, you need to have the capital to get your business off the ground. For many would-be entrepreneurs, this can be the hardest part.
Aside from using your savings, applying for a loan from the bank can be your next go-to option. However, studies show that 45% of entrepreneurs got denied a loan application more than once. Where do you turn when the bank says no?
Luckily, there are more options for funding a small business than ever before. With a bit of creativity and outside-the-box thinking, you can get the money you need to make your business dreams a reality. Here are four of the most creative ways to fund your business:
Crowdfunding
You may be the type who wants to establish and grow your business on your own. But when it comes to raising money, you may want to consider the crowdfunding route. This method allows you to solicit donations from family, friends, and even complete strangers who believe in your business idea.
To be successful, you’ll need to create a compelling pitch that will convince complete strangers to invest in your business. You can create a video or write a detailed description of your business idea and why it’s worth investing in. Give them reasons to believe you will succeed and that their investment will pay off.
GoFundMe is one of the most popular crowdfunding platforms that managed to help raise millions of funds for different causes. However, just because this is the most popular crowdsourcing platform does not already mean this is the best choice. Note that there are competitors of GoFundMe that can be a better choice.
Unlike most crowdfunding sites, there now exist many sites like FreeFunder that do not charge a platform fee. Usually, GoFundMe charges a recommended tip on top of the payment processor’s transaction fee. The site also donates to your fundraiser when you raise a certain number of shares on social media sites. This means you get the most out of y our crowdfunding efforts after choosing the right platform.
Apply for Business Grants
Government-sponsored business grants are a great way to get the money you need to start or grow your small business. The Small Business Administration (SBA) typically offers these grants to businesses of all sizes.
Your business must meet certain criteria to qualify for a government-sponsored business grant. This usually includes being in operation for at least two years and having a good credit score. You can apply for a grant online or through your local SBA office.
Private grants are also available from organizations like the National Association for the Self-Employed (NASE) and the American Express Foundation. These grants are for businesses in their early stages of development or have been struck by the recession. To apply, you typically need to fill out an online application and provide supporting documentation.
Trade Goods or Services for Advertising or Marketing Help
Another great way to get started without spending any money is by trading goods or services in exchange for marketing or advertising help. You can offer what products or services you currently offer in exchange for help with marketing tasks like social media promotion, graphic design, or even website development.
This type of arrangement is beneficial for both parties because of the following reasons:
- It allows you to get started without any upfront costs.
- The other person or business gets their needed services at a discounted price or for free.
- You get to test out the skills of the other person or business before hiring them full-time or working with them long-term.
- You get valuable experience working with them, which can help determine if they’re a good fit for your business.
You can find someone to trade goods or services with by using online directories like Craigslist or Fiverr. You can also reach out to people or local businesses you know to see if they are interested in trading. Make sure you come up with an agreement that is fair for both parties before starting any trade.
Use a Third-party Payment Processor
These days, more people are using their credit cards to buy the things they need and want. According to reports, 27% of consumers use their credit card as payments, while 28% uses their debit cards and 19% with cash. By accepting more payment methods, you can attract more customers and sales.
Most businesses use a third-party payment processor like PayPal or Square to accept credit card payments. These platforms typically charge a small percentage of each sale as a processing fee. They also offer other features like invoicing and the ability to set up recurring payments, which can be helpful for businesses that offer subscription-based services.
Since you still lack the funds to pay for such subscription-based services, you can try their free trials or other promotional deals for now. This enables you to test their features and see if they fit your business well before signing up for a paid subscription. You can start by looking for deals on popular third-party payment processors like PayPal and Square.
There are many ways to start your small business without spending any money. You can begin by using the free resources and tools available to you. You can also look for government-sponsored grants or trade goods or services in exchange for marketing or advertising help. Lastly, you can use a third-party payment processor to accept credit card payments. By taking advantage of these free or low-cost options, you can focus on growing your business without breaking the bank.