Top 5 Sources Of Capital For Your Business

Are you looking to start a business but have no idea where to start? A bunch of steps exist between tuning your idea into a reality. The current movie industry has a bunch of movies about entrepreneurship that make everything seem really easy. After watching "The social network", starting one seems relatively easy. Well, it might be. We can't know unless we've tried. What you see in movies or read in articles are just success stories. Success stories exist to instill hope among individuals. Some people tend to believe what happened in someone's success story will happen in their lives too. If you believe that, you'll believe anything.
The key to finding out is trying. For most entrepreneurial ideas, trying requires capital which might not be accessible. There are however numerous ways of sourcing funds for your business.

Below I go through a few ways you can obtain finance for your business. The methods can be adopted by both start-ups and established businesses. Though some are specifically for start-ups.

Friends and family
Friends and family are the easiest way of obtaining money for your idea. All your need is a convincing tongue and you could pitch your way into free money. Money from friends and family usually comes without interest. Mark E. Zuckerberg had an idea to make a website that connects the Harvard campus. He wanted a site where students come together and share experiences, ideas, interests, etc. He shared this idea with a friend who threw in $1,000. This was how the highly profitable Facebook started. Facebook currently has more than 2 billion daily users.
This method is highly flexible but family and friends usually bring nothing to the table beyond finance.

Checkout: The Cheapest and Easiest income generating ideas to venture into.

Angel Investors
These are wealthy individuals who could give finance in exchange for a share of equity. They usually have experience in businesses in which they invest. This could positively help grow your business. They can however end up taking more control of your business usually more than what you are willing to give.

Venture Capitalists
These are investors who inject money into your business for equity but only get it back once your company is acquired by another or goes public. They usually bring in large amounts of capital. With more investment capital comes growth. But Venture Capitalists usually end up pushing towards getting a return on their investment which might involve selling your business.

Incubators 
These are organisations that lend a helping hand to start-ups usually through mentor-ship. They offer necessary training, continuous checks, funding, etc. They mostly involve an element of competition and you might have to compete for a slot on the program. Incubators are the closest to free money after friends and family. But they are the hardest to get since they involve an element of competing. Organisations always screen out ideas and they choose specific ones of interest to them. They also majorly concentrate on funding start-ups.

Crowdfunding
This involves raising small amounts of capital from large groups of people. Crowdfunding is relatively new and has become popular with growth of internet accessibility. It is usually done online. Most Non-profits use their websites to request users to donate a small amount of money to their cause. once you get thousands of donors, you are bound to get some good money. Getting supporters for your cause can be quite hard and with no supporters, you get nothing.

Conclusion
Every alternative has pros and cons. You should choose an alternative accessible to you after carefully evaluating options. I personally haven't used any of the above methods. I always stick to saving for investment. I always believe if you choose to save for future spending, you aren't really saving. you are simply postponing your spending. That is what i believe, your belief could be different. But saving is limited and takes a lot of time. Another source you could consider is obtaining bank loans. You might even regard it as a more flexible source of capital for business. It also has its pros and cons. what I'm simply stating is choose wisely.

The above article is based on a mixture of research and personal opinion by the writer.
If you would like to contact the writer Arthur Kakande directly, forward your email to service4businessweknow@gmail.com with the post title as your subject line. Any compliments, criticisms, or any piece of information will be much appreciated.