You have had several business ideas over the years, but you have that one idea that you know can change your life, touch lives and change the world. However, it needs capital, and you can’t figure out how to raise funds to launch or boost your enterprise.
Most of the booming businesses around the world today had a capital problem. It takes resilience, determination, and focus to explore and gain from any fundraising strategies. As an entrepreneur, you know there is money calling your name out there and you need to go for it — but first, it’s down to the basics on capital.
Is Capital All About Money?
Capital comprises both financial assets and the monetary value of assets. Such assets include cash and tangible property such as buildings, machinery, and other infrastructure, but exclude materials used in the production process. Capital is long term and continues to generate income through investment.
Other than being a factor in the production process, renting out such resources or selling them creates more wealth. You need to think out of the box to reach your market or create one. Sometimes your idea could require unique marketing strategies. Promoting your company with a reputable site will help you stay ahead on the market, as the Corpina website does for Nootropics.
Sources of Capital
Debt Capital
If you can raise collateral, you can acquire debt capital by borrowing money from financial institutions, family, friends, public sources such as federal loan programs, and insurance companies.
When considering borrowing, see whether you can find an agency with tailor-made solutions for your business. Some companies fund startups while others would find such businesses too risky. Ensure too that you negotiate for a comfortable loan repayment plan to avoid losing your investment or ruining your credit ratings if you default on payments.
Equity Capital
With equity capital, you acquire resources you don’t need to repay don’t owe; this includes your private investment if you have been saving to start your business or stock you sold to finance a business venture.
You could also solicit donations through crowdfunding initiatives.
Although crowd funding organizations comprise top fundraisers for nonprofits, they offer the opportunity for you to raise capital for your business or project on their platforms. With such, you can raise money for various aspects of your enterprise such as legal fees, equipment, start-up costs, marketing expenses and supplies.
Venture Capital
If you don’t want to borrow money, you can pool resources with others who are interested in your idea. You become partners, negotiate, and draw up an agreement on sharing of profits. These Angel investors are wealthy individuals willing to invest in viable startups.
Although the aid comes by your offering them equity on your part, the venture capitalists can mentor you to meet your goals. For example, they can insist on you acquiring business management tools to manage your employees’ hours and the payroll.
Remember that employee salaries, research, business administration, and development are part of the investment. They reflect your projections and are a basis for judging your business ethic and performance.
Such online business management tools will give frequent updates on your daily business activities of your employees, even those on telecommute arrangements and leave you time to concentrate on other ways of growing your business.
Consult Other Entrepreneurs
Starting and managing a business comes with hidden costs. Ask other successful investors to about multiple and affordable ways of raising capital. Inadequate capital caused by underestimating expenses will cause your business to fail.
Remember, you are the primary resource of your enterprise — so ensure you get adequate skills on all the aspects of your business.
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About the Author: Jim Thompson is a super-connector with OutreachMama who helps businesses find their audience online through outreach, partnerships, and networking. He is a professional writer who has been in the business for five years. He has hands on experience with cars, tech, and relationship advice, among other things. Because of how quickly he can turn articles around, he is able to take on multiple projects at once. His writing experience spans from SEO articles to technical guides and everything in between.
Photo Credit: stock photo
Capital? Heaven for most entrepreneurs is PROFIT!
Sing it, Steve! lol
You are 100% correct.