A terrific business plan or a groundbreaking idea is only the beginning of the process for an entrepreneur. Once you have these things in place, you’ll still need to take many steps to start your business and get it off the ground. For starters, your enterprise may make money in the future, but you’ll need money at the beginning to set everything up.
How can you go about funding this business? It’s one of the main initial hurdles that people face, and it keeps many entrepreneurs from branching out on their own. Here are three potential options.
Business loans
First and foremost, financial institutions will sometimes give out business loans if they like a business plan and think it will be profitable. The downside is that you have to pay aloan back with interest, so you’re paying more than you actually borrowed.
Investors
Another option is to bring on a personal investor who will fund the business for you. This can be helpful because they may be less risk averse than a financial institution. The downside, though, is that the investor may want an ownership share in this new business.
Self funding
Finally, there are often options to self-fund your business. Some people crowdfund, promising products in the future if customers will pay now. Others simply start a small business on the side with the money they can afford, and then they continually reinvest the money that the business earns to help it grow.
Exactly what you decide to do will determine the steps you need to take, but it’s important to be aware of your legal options at this time regardless. Seeking legal guidance proactively is generally a wise move for new entrepreneurs.