Over twenty years ago, Jack Ma and 17 others pooled together funds to start Alibaba. Shopify began because three friends needed a shopping cart solution while creating an ecommerce website for snowboarders. What they found didn’t impress them, so they built one.
Will Dean converted a $7000 savings into a business that caters to obstacle runners. And we all know the Facebook story and its early days of bootstrapping. What we’re saying is, there are more than two ways to fund your business ideas in 2024.
From scraping together savings for an extended period to getting business loans or grants, to crowdfunding, to securing strategic partners for your business or even offering pre – sales for your products, and many more.
Let’s find out!
How to Fund Your Business Ideas
Securing funding for a business idea in 2024 can be challenging for new business owners and start-ups. However, it is possible with hard work and perseverance. With determination and effort, obtaining funding for a business idea is achievable, even in 2024. Here are some options for you to consider as you set out to fund your ideas:
Savings
Savings isn’t old-school. Using your savings for a business idea eliminates the need to pay interest on loans or make back an investment. This is a major benefit. After all, it’s your money, and your business.
Source: Unsplash.
If you’ve rubbed an idea in your head for a while, you can take active steps towards execution through earmarked savings. Especially if your business idea relates to dropshipping, online consulting, or other low-capital opportunities.
Before upending all your savings to fund an idea, consider the impact of this on your finances. Do you have fall-back money for emergencies? Are your cost estimates accurate? Have you sorted out your personal bills, needs, and other necessities?
When starting a business, you may not want to spend money on new shoes. However, you still need to cover essential expenses such as food, rent, and bills. So have that locked in before you empty your savings for a business idea.
Business Loans.
One of the most viable ways you can fund your business ideas in 2024 is to get a business loan. With the growth and advancement in the financial sector, you have access to different offers of loans. They range from commercial mortgages to business term loans to letters of credit, and working capital loans.
To find the best offer for your business, research different lenders to choose the right one for you. For example, if you are looking at making a major upgrade to your business or getting huge acquisitions; a business term loan would be a good option for you.
Before you begin, make sure you have important documents prepared. These documents include your business plan, expense sheet, profit forecast, and financial projections. Have them ready for the process.
Venture Capital Investments
If you’re starting a fast-growing company and willing to share ownership, venture capital investments are a good option for funding.
Venture capital investors will fund your business in exchange for an ownership share and a seat on your board of directors. Think of the investors in Shark’s Tank and Lion’s Den. So, be ready for a level of control in your business, in exchange for their funding.
But if it’s any relief, they can also offer mentorship programmes, which will be essential for the growth of your business.
There is a general and not so complicated process of getting venture capital investments. Find investors like angel investors or venture capital firms such as Andreessen Horowitz and Bessemer Venture Partners. Then, share your business plan with them and have them do a diligent review. If both parties are satisfied, you can then discuss the terms of investments.
Crowdfunding
Crowdfunding is raising money for your business ideas from many people on websites like GoFundMe, Kickstarter, and Patreon. Do this with social media.
If you are looking to start a small business, this is one option you can consider. Crowdfunding is competitive. To succeed, your business ideas, models, and strategies must be well thought out, structured, and compelling.
Pre-sales
Companies call a pre-sale when they sell a product before launching or releasing it. You can sell your products before they are available by promoting them on a website or through email marketing. Do this by creating anticipation for the products.
This strategy allows you to generate interest and potentially increase sales. By building excitement early on, you can create a buzz around your products. As an entrepreneur, you can sell your new products before they are officially released. This can help you get money quickly for your business ideas.
This seems easy to do but there are precautions for you to watch out for. One of which is to ensure that you put your pre-sale strategy in place. Don’t just rush into it.
Choose your audience and platform carefully, like picking the right email marketing platform. You might also want to prepare an effective marketing strategy.
Government Programs
Government programs are another channel that provide substantial funding for business ideas. These could include grants , loans , government – organized contests , etc. This may seem like it’s almost unattainable but you just have to know where to look.
Bear in mind that not all funding flows directly from the federal government to small businesses. The government distributes some funds to state, local governments, and agencies who then distribute them on a local level. This may move slower than other options, but who says you can’t try it out?
Why You Need to Fund Your Business Idea
But, why do you even need to fund your business idea? If securing funding is this strenuous, why not just wing it and see what happens?
You might be thinking this, and it could be why you haven’t received the funding you need for your business idea. Well, here are some reasons for planning how you’d fund your business ideas:
For growth of the business
If you have the growth of your business at heart, you should know that funding your business idea is crucial. Growing a business with funding is easier.
Source: Unsplash.
Whether it’s a high- growth company , a textile – producing factory or a home- based business that is just starting out, having enough money for your business idea encourages you to intensify your efforts in growing your business. You are able to cover your start-up costs and even operating costs.
When you have enough money for your business idea, you won’t worry about paying for expenses or debts. You can sleep peacefully without stressing about finances. You can channel your thinking towards developing and executing growth strategies.
For expansion of the business
Getting a loan or crowdfunding can help your business grow and expand. You can easily step on to the next cadre, when you have the funds readily available. You will also be able to make necessary and timely iterations in your business.
Adequate business funding lets you grab opportunities to grow and expand your business. For example, you can invest in new products and services that will aid the extension of your business into new markets.
Acquisition of assets
One reason why you have to fund your business ideas is to be able to acquire assets when you need to. As your business grows, you would need to acquire more assets for increased efficiency.
You may need to purchase more machineries, vehicles, office spaces, etc and this would require money.
Employability purpose
With expansions and growth of your business comes the pressing need to hire more hands. You can’t successfully run your business alone or by overworking and micromanaging a handful of staff.
You want your businesses to expand, yes? Be open to hiring more staff. Onboard professionals with industry experience and invest in the all-round growth of your team.
You may also need to plan for consultations as your brainchild develops. Established businesses often add external auditors, third-party recruiters, business coaches, and other versatile experts to their payroll. You need funds to do these.
Longevity
Funding your business ideas procures the longevity of that business idea. Funding ensures your business is around for as long as it can be.
Passion alone won’t guarantee your business’s existence. Access to working capital as well as the right team direct your business’s growth and trajectory.
Conclusion
According to data from the US Census Bureau, 5,481,437 new businesses were started in 2023. Taking how 2024 started as an indication, there just might be more than that this year.
With more businesses hitting the market, the growth of your business should be your priority. Stuck on how to fund your business ideas in 2024? Give these options a try and see how that goes.
If you’re just starting, consider creating a digital presence via Shopify – or other viable platforms. We help entrepreneurs – newbies and established alike – reach new customers and convert them into loyal buyers. Contact us today to see how we can help.
