In this post, I will show you 3 simple but effective ways you can raise money to start your own business.
In my regular interactions with my subscribers, I realize that finance is one of the most difficult challenges entrepreneurs face in their business ventures. Whether you need to get your business off the ground or expand an already existing business, money is very essential to get things going.
As you may well know, the best means to raise money for your business is through your personal savings. The problem is, a lot of people don’t have a personal savings to draw from in the first place. This is why many people spend their time looking for investors.
Unfortunately, investors are simply not interested in most of the business ideas brought to their attention because they are still ideas. Investors invest in businesses not ideas. So how do you raise seed capital to turn your idea into a business?
1. Crowd-source your capital
Crowd funding means to find more people who would be interested in the same business and get them to join forces with you so you can achieve the same thing.
Let’s say you want to start a poultry farm which should take 500k. You can’t afford to put up the money by yourself, so you find 4 more people who are also interested in starting a poultry farm. Together, 5 of you will contribute 100k each and your poultry farm is good to go.
The most appealing thing about crowd funding is that you are able to own a business (or part of it) with only a fraction of the total cost. Also, it allows you tap into the power of team work where everybody puts hands together to achieve something more. Most importantly, you can gain valuable experience in the business with only a little money at stake. When you branch out to start your own, you are more experienced to take things on.
The poultry farm is only an example, of course, but you get the point. Together Everybody Achieves More.
I belong in a WhatsApp group where someone is crowd-funding to start up a cassava processing plant. It’s really not that complicated if you can state clearly what you want out of the business.
Now, there are some factors you should consider before you go this route.
First, you need to protect yourself and everybody else. Make sure you get all agreements in writing and that every member of the team understands clearly what the terms are.
Only work with people you can trust. One reason people don’t do this much, especially in Nigeria, has to do with trust. Everybody wants to answer Okeke & Sons, you don’t want to be in a situation where you are looking over your shoulders all the time.
2. Do a Joint Venture
Joint venture works much the same as partnership.
In a joint venture, you want to start a poultry farm but you have no money. You do have a piece of land, however, on which to start farming operations. So you find someone else who has the money to start a poultry farm but does not have a piece of land. Both of you team up to start the farm and share profits.
When done correctly, joint venture is one of the best ways to start your dream business with no money. However, you must have something which the other parties in the venture don’t have. You must contribute something they cannot do without. If not, your position is redundant, more or less.
Mr Oladele explained how he was able to start his real estate business using the joint venture strategy. It’s very simple, yet effective. As with all things, most people shy away from this because of trust issues.
3. Take a detour
A detour basically means to take another route, do something else.
You need money to start a business but you don’t have the money. So you do something else to raise the money and go back to your dream business. A detour could be anything so long as it enables you raise the money you need.
Your own detour could be to take a job while you work on your own business by the side. Or you can analyze your marketable skills and sell your services while you save the money you get. These days, freelancing trends as one of the ways to make money online, money you can save up over time to start your business.
One of our Featured Entrepreneurs raised some money to start her magazine by ‘supplying Cowbell milk from Obiaruku to Abraka in Delta state‘ for a few months. Another one ventured into agriculture to raise money for his paper mill company. When you are determined enough to start something, you can do anything to get it started.
The thing with taking a detour is, it takes you more time to start the business you want. But when you think about it, it’s basically common sense, right? You need to raise some money and there’s nobody to give it to you. So you raise it yourself.
With determination and the right application, you can raise money to start your dream business through any of the 3 tips I mentioned in this post.
Now, all you have to do is share this article with your friends.