Even knowing that 75 percent of all startups fail, many people still want to be their own boss and begin a new business. So, why would someone take a loan out for hundreds of thousands of dollars when the chance of failure is so great? Many do it for freedom because it can be rewarding, or for the challenge. There is no right or wrong answer when it comes to having entrepreneurship, but there are ways to begin a business without money or experience.
Ask Friends and Family To Help
The seed round, or initial investment, is often provided to entrepreneurs by their friends and family in exchange for a percentage for the company. Some ask for an advance on their inheritance, some may receive a private loan from a family member, and still, others may ask for donations as they begin their new ventures.
Look Into Small Business Grants
Programs abound to promote entrepreneurship in the business world. Local, federal, and state governments all have loan programs with available low-interest rates, large grants, or venture capital. The grants are free money if your business qualifies, so it is well worth looking into the programs your new business may be eligible for.
Enter the World of Crowdfunding
New businesses, charities, and entrepreneurs all use the innovative form of raising money called crowdfunding. Interested people donate to one of several possible sites to help fund new companies, promote ideas, or manufactured items. In return for the donation, some participants are offered a reward. Since there is no guarantee for this type of venture, many people shy away from funding through this sort of site.
Ask About Micro-Loans
Most major financial institutions limit the number of small loans they provide and most only lend to businesses they have a long-standing relationship with. That is why the SBA has set up a list of micro-friendly loan companies in each state. Please note that micro-loans are not available during your company’s first year of business due to the high risk of loss, but after that, the loans can be a great way of obtaining low-interest money up to $50,000.
When turning an idea into a business and beginning entrepreneurship, there are ways you can find money to fund your venture. Although it can be difficult to locate business funds, you can use the four ideas above to help your start a business without money or experience.