Need money for your business? 9 tips!

You want to invest (to start up, expand, replace, etc), but you don’t know yet where the money should come from. Make use of these nine sources.

1. Free up your own money. Take money from your bank, break open your piggy bank, sell your car or something else (you can even sell receivables: “factoring”). This money is called “risk-bearing”: it is gone when things go wrong.

2. Arrange a loan. Go to a bank or other loan institution, go to your own social circle (FFF: “friends, family and fools”), to a peer-to-peer loan platform (a form of crowdfunding), pawn something valuable. Note: loans are often very expensive.

3. Sell a share. Well known, but not easy. Your business really has to be something, should investors want you. The earlier you sell, the worse your position (they want a large share for a low price). You can also search the informal circuit for an angel investor (a wealthy person who wants to invest in you).

4. Arrange barter deals. You need something for your business. Maybe you can get it by trading it with what you have to offer – the services or products of your business (possibly in the form of a credit). Especially smaller companies are open to this type of deals.

5. Ask for supplier credit. You need money because you want suppliers to serve you, as to you get what you need. You can also ask them to deliver already, and make an arrangement for later payment. You can offer various things in return: commitment to keep doing business with them, a payment premium, a guarantee, and/or your own goods/services.

6. Pre-sell your future product. Sell now, deliver later (can also be in the form of vouchers or a credit, e.g. if you start a restaurant). You can convince people to do this by offering a discount compared to the future launch price. Then you already have money to start.

7. Arrange support deals. With sponsorship or crowdfunding, you aim for parties wanting to support you, display their name in your area, or even show off with you. You get money, they get exposure (sponsorship), or rewards/perks that appeal to them (crowdfunding).

8. Acquire donations. There is a world of funds and subsidies for a wide range of things, including commercial business. Investigate this. And you can also try to arrange donations in your own network or via certain dedicated platforms.

9. Reduce your need. A disguised, “reverse” source: strip down your plan so you will need less. Most entrepreneurs who are looking for money might best start with this option!

Now, which source should you use? As many as possible! With many bits, you’ll soon have more than you thought feasible. At the same time, you need to know that the money is going to pay off. Have you calculated the business case that reveals the minimum performance needed? Do you know if and how the investment will enhance your position on the market? Do you know what you can “tweak” to become more successful? And how to manage all this? In addition to your funding needs, you need to understand a lot about business development, “strategic levers” (there are quite a few), how to function optimally yourself, and so on.

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