Favour was desperate when she met me a few weeks ago. She was about to take a major career decision, and she needed advice. She was passionate about starting an Agric based business. Specifically, she wanted to grow some cash crops and also go into Animal husbandry. Her family however wanted her to go to a fashion school in another city, and were only willing to spend
At the end of our conversation, I was convinced she was cut out for Agriculture and was not just looking to make some quick buck. But her dream was kept on hold because she didn't have enough money to start.
So many entrepreneurs are like Favour. They allow lack of funds to prevent them from building the business of their dreams. It shouldn't be so. Entrepreneurs who lie dormant, waiting for the perfect time or conditions will wait for a long time.
Smart Entrepreneurs don't waste time with their ideas. They go out there, find a way to get the needed funds and start their business.
Here are 7 unconventional ways you can do the same thing:
1.Get ready to do some hustling
Just before I started my consumer goods business, I attended a training program where we learnt not to allow the lack of funds to stop our start-ups. The facilitator rather advised that we should engage in any legal money yielding venture to keep ourselves busy and raise a little money too.
To get the needed funds for their business they maximized the 2008 Democratic convention. They bought a lot of cereal and designed some special election themed boxes - Obama O's and Cap'n McCain's. They sold 500 boxes of these cereals at $40 a box and raised $30, 000 for Airbnb.
2.Create a friends and family donation list
If you have a large social circle or a large family, you could maximize this. All you need to do is create a comprehensive list of friends and family who you can get a minimum amount of money from as support for your business.
For instance, let's assume you need to raise $10,000 for your business. You can break the capital down into tiny bits of $200 divided into 50 places. All you'll need is to get each member of your close social friends and family to give you $200 each.
They can easily give $200 than help you with $10,000 for your business. Big money scares people. Breaking it down into much more smaller fragments, like I did above, will help them easily make the decision to fund your business.
3.Take some calculated financial risks.
Success in business requires that you take risks from time to time. Sometimes you may have to hire a key staff or invest in a new venture solely based on your gut instinct. In the same vein, you must not rule out the place of risks in raising funds for your new business.
For instance a lot of people have been able to raise extra money simply by playing the game of chance. It could be a few hundreds of dollars or it could be in millions just like Daniel Negreanu and other professional poker players are doing.
4.Maximize private loan systems
Many people especially women, with good business plans complain that they are not able to get loans for their small businesses from banks, and even if they eventually do the process is usually very long.
Fortunately, there are now many organizations where entrepreneurs can get online personal loans without having to go through the hassles of going to commercial banks. Utilize this avenue and get the required funds needed to start your business.
5.Look out for Grants and Business competitions
Lots of organizations, foundations and individuals invest millions as grants every year to support and encourage entrepreneurship.
Some of them come in the form of business plan competitions. One typical place you can find them is in the business section of most tabloids and state government websites. For instance New York State regularly lists all available incentives and grants for businesses.
Search for these competitions and apply. Even if you don't win, you will get exposure and you could even get an angel investor in the process.
6. Get an Angel Investor
An angel investor is typically a high net-worth individual who is eager to invest in new start-ups as a way of helping the future generation of entrepreneurs.
Note that these people usually require an ownership stake in these new businesses as a way of compensating for the risk they are taking by investing in an untested business. On the good side however, this makes them available for free mentorship and coaching.
7.Get your trusted prospective customers to invest in advance
As a consumer goods entrepreneur, one of the strategies that helped me out when I was on my lowest ebb on business funds was to get my trusted customers to make their order and pay in advance.
That way I was able to use their money to buy the things they needed and then supplied it to them later when they needed it. According to Leon Levy, investing other people's money is the best business one can do.
Finally, do not let lack of funds prevent you from turning that great idea into a great business venture. It may not be easy in the beginning, but if you stick to your guts long enough, you will have reasons to smile at the end.
Have you started a business in the past with limited capital in the past? Let us know about your experiences in the comments section below.