If you’re looking to start a business but don’t have capital, there are a growing number of ways that you can secure enough money to start your business.
Depending on your business type and the amount of money you are looking for, there are a number of avenues that you can pursue to secure the amount that you need. These means of procuring money are very popular in India, so it will not be difficult to find interested donors on the available platforms.
Find an angel investor
Angel investors are wealthy individuals who want to invest their money in nascent businesses. Angel investors often provide advice in addition to funding. If you are in a particular niche industry, such as accessories, you may be able to find an investor who is not only interested in providing you with capital but who also has experience in the industry and can offer useful tips on getting started.
What you will need to do to find an angel investor is create a pitch to help him or her understand your goals, the feasibility of your business plan, and how you plan to manage your finances once started. If an investor is convinced by your idea, he or she will be more likely to want to fund it.
There are several websites where angel investors can be found. Some of the more popular ones in India include Indian Angel Network, Venture Cataylsts, and various local groups like Calcutta Angels and Hyderabad Angels.
Crowdfunding
As the name suggests, crowdfunding is a way of collecting various amounts of money through “crowds” – unknown people, not necessarily wealthy ones but people who are interested in helping worthy causes.
In order to be successful at crowdfunding, you will need to present a business model that appeals to a large number of people. If your target is women, for example, you’ll want to create a vivid description of your product that will enable other women to visualize your product line in reality.
Crowdfunding is generally broken down into four major types: rewards, donation, debt, and equity. Depending on your company’s needs, you can frame your campaign according to any of these categories.
Government and private loans
The most obvious way to procure money for a nascent business is through loans. People choosing this way to get capital for a new business should proceed with caution, though, as there can often be strings attached.
One of the more popular options in India is getting an MSME (micro, small, medium enterprise) loan. The government has even enacted the “MSME in 59 Minutes” scheme for businesses that have already gotten started but need more capital to grow.
An option that is particularly popular among women is the CGTMSE (Credit Guarantee Fund Trust for Micro and Small Enterprises) scheme, which provides collateral-free loans to micro and small businesses. Preferences are given to female entrepreneurs for these loans.
Private loans are also an option, but as interest rates can be high, people considering this route should proceed with caution.
Consider using blockchain
Blockchain is still establishing itself as a standardized mechanism for business operations, but if you incorporate it into your business plan, there could be ways for people to get involved. According to buidlbee, there are interesting examples of successful projects where people have contributed to existing projects in stablecoins by means of using blockchain technology.
Look into your own resources
You may find that digging into your own personal assets can be a way to finance a start-up. People have sold property, stocks, or other assets to gain the necessary capital to get a business started.
There are advantages and disadvantages to this idea. Finding your own resources eliminates the need to be reliant upon anyone else, and therefore the pressure to succeed is only on you.
The primary disadvantage of using your own money is the risk involved. Once you’ve utilized your own savings, it will no longer be there for you if your business should die. So it is a calculation you will have to make.
Whatever your method, do it in earnest
Starting a business can be a major challenge. Expect that there will be obstacles and pitfalls along the way. But if you are careful and determined in your planning, you should be able to find the right resources to get your business started successfully.
Image Credit: Photo by Christophe Van der waals on Unsplash (Source)
