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One of the main things holding people back from starting and building a successful online business is a lack of funding – or the belief that they lack the funding. The prospect of making money online is exciting, but when people are faced with the truth that they have to invest money into their vision in order to make money, they are surprised, and their dreams fall by the wayside.
The thing is, starting a business online is no different to starting up a physical, bricks and mortar style business – it needs capital to get going and this often involves taking a risk.
“The biggest risk is not taking any risk…in a world that is changing really quickly, the only strategy that is guaranteed to fail is not taking risks.”Mark Zuckerberg, Co-Founder and CEO of Facebook
Now, with an online business, you CAN start off with very little financial output, and then work your way up, investing profits back into the business and going from there. The problem with this strategy is that you may not have everything that you need to initially get you going to make you the money. When I first started freelancing, I didn’t invest in any social media schedulers or a decent business planner. I didn’t think it was worth it to begin. Sure, I managed to wing it for a while but to begin with, it made my working life a lot more difficult and I really wish I had invested in it from the very beginning. It also creates a problem with motivation. For many, if they haven’t taken a monetary risk, they are less likely to work as hard – there’s power in risk. The more you invest in something, the less likely to you want to lose it.
However, if you are working, it can be too much of a risk to begin with to give up your job to launch a business especially if you have a family to support, and if you aren’t working, you may not have the money lying about to invest in a business. I was in the latter category – I was a stay at home mum, who decided to try her hand at blogging and then freelancing. I had next to no money to put into a business. If this position sounds familiar – which I’m sure it does to many of you – you need to get creative and find a way of funding your new online venture
Funding your online business
1. Find An Investment Company
Investment Companies are happy to invest in companies and give them the capital that they need to get going, in return for shares in a business. This is especially useful if you are planning on launching an operation on a bigger scale and need a more substantial boost of capital to do this.
2. Small Business or Personal Bank Loans
Many banks and credit unions will offer small business or personal loans, as long as you have the means to pay it back, even in the early stages of your business. A personal loan is more difficult to obtain if you have no proof of income, so bear that in mind before you quit your job! If you are worried about getting into too much debt starting up, White Moutain Partners can give you advice.
3. Sell Stuff On eBay
You’ve heard of the saying ‘one man’s junk is another man’s treasure’, right?Well, use that to help you find your business. You’ve more than likely got hoards of stuff lying about that you no longer use or need. For me, it was my tiny little handbags and ridiculously high heels. Going to Asda to pick up my click and collect is like a night out for me these days, so there was little point in me keeping my beautiful, but completely impractical 4 inch high purple velvet strappy sandals. I spent a couple of hours taking photos and listing them all on eBay and got a fair few quid for them – all money I could then invest back into my business.
4. Check Your Expenses And See What You Can Cut Out
Look at your bank statements for the past three months and be honest with yourself. How many coffees from Starbucks are on there? If you want to be successful in business, you have to make sacrifices. One coffee a day a £2.50 is £12.50 a week. Over a year, that’s £650 – in coffees alone! Other things you can look at include your subscriptions – do you really need Sky, Netflix AND Amazon video? All those little things soon add up.
5. Kickstart or Crowdfund
These are relatively new ways of raising money, but many entrepreneurs have had a nice injection of cash by turning to their peers and the public for help. You need to be creative – you’ll get nothing if you simply state that you need money to get your business up and running. Instead, show them why you are different from everyone else holding their hands out for some cash and share your vision with them.
What are your tips for funding an online business?