Raise cash

Raise cash

Finding money to start your business is probably one of the most difficult parts of starting a small business. There are many ideas and many entrepreneurs and just not enough funding to go around.

As you start up, it’s important to keep your costs as low as possible, and to be smart about how you use your resources. When you raise funds, don’t just think about funders who are willing to give you cash. Donations of products or services – such as phone lines or office space – or discounts are just as important as cash when you’re try to start your own business.

Where to get start-up funding
1. You, family and friends: Most ideas are financed by the actual entrepreneur, or his/her famil, and friends before other investors are involved. You have to prove that you believe in your own idea before you can convince other people to invest in it.
2. Informal or “angel” investors: Once you have proved your idea and shown that it’s a good product or service, you may approach rich people and ask them to put more money behind it. It is very difficult to get this type of funding, but hey – if you don’t try, you’ll never know.
3. Venture capital: If you’re starting a technology-based business and you think it has huge potential, you might be able to convince a venture capitalist (someone who invests in ground-breaking ideas) to invest some cash in your business.
4. Bank: A bank may be a good option if you’re sure you business will do well, but you’ll need to make sure it grows enough to cover the interest rate (the money you have to pay the bank for giving you a loan). You’ll also need to put down collateral – something they can take if you end up being unable to pay back your loan.
5. Public sector: The government or nonprofit organisations that support entrepreneurship may offer grants, awards, or some other type of support to young entrepreneurs. It might also be a good idea to enter business plan competitions.

For more info on funding, check out:
1.http://entrepreneurs.gate2finance.com/?q=node/118
2.http://www.africareport.com/business-news/2010/09/27/young-entrepreneur-business-plan-competition/ (business plan competition)