Finding Investors for your Business
Starting a business, or growing an existing business, takes money. But where can you find it? Here are some tips for ways to find financing for your business.
Friends and Family
It is possible to borrow money from friends and family, and many small business owners do this when they’re starting out. However, it’s important to remember that your loved ones may not have very much money to spare, they may want to have input into your business if they have provided funding, and borrowing money from friends and family can have an affect on your relationship. Think about it carefully before you borrow money from your loved ones.
Your friends and family can also help you out by offering you connections to their networks. You never know who someone you know might be connected to, so ask around.
Crowdfunding
There are many different crowdfunding platforms, and some are specifically dedicated to certain industries (arts, technology, etc.). If you are well-known in your industry or if you have the ability to really market your idea online and through social media, you’ll have the best chance at succeeding with crowdfunding.
Entrepreneur Networks
Depending on where you live, your city or town might have several entrepreneur networks, start-up support services, incubators, and accelerators. These can help you in many ways. You’ll be able to get advice from other entrepreneurs and those who are more established in your industry, build connections and relationships, and gain access to funding sources that you may not have thought of.
Government Grants and Subsidies
Spend some time looking at the different grants, subsidies, and small business loans that might be available from your local or federal government. You might be intimidated to apply, but don’t let that stop you. In many cases, fewer businesses than you’d expect will apply for a grant or subsidy, so you probably have a better chance of getting on than you think!
Bank Loans
Bank loans are one of the most common ways to finance a business, especially when you’re just starting out. Keep in mind that you’ll likely need to have good personal credit to get a bank loan. You’ll also need to show that you have a solid business plan. Shop around at different banks and see which one offers a loan that best suits your needs.
Angel Investors
Angel investors are typically wealthy individuals (sometimes retired business people) who directly invest in small businesses. In most cases, these investors will want some influence on your business in exchange for providing financing (such as a seat on your board of directors). Angel investors can also bring their experience and their contacts to your business, so they often end up giving your business more than just money.
To find an angel investor, start by checking local business networks and investor networks in your area. Talk to incubators, accelerators, and other start-up resources as well. Then you’ll need to create a strong business plan and conversation to convince an investor that your business is the right choice.
How a Chartered Professional Accountant Can Help
If you’re looking for business financing, there are a number of ways a Chartered Professional Accountant (CPA) can help you. A CPA can analyze the market and conduct due diligence, which can assist you in understanding what you’re getting into and who your competition is. This will give you the insight you need when creating a business plan or speaking to investors. A CPA can also help you develop business strategies, create investor packages, and give you the knowledge you need to create a strong business plan to present to potential investors.
Of course, this is in addition to the fact that a CPA will manage your organization’s accounting, so you’ll have a clear picture of where you stand financially and exactly how much funding and financing you’ll require to achieve your business goals. For more information, feel free to contact us.
