Although online businesses are by their nature usually much cheaper than offline businesses to set up and run, this doesn’t mean that it’s not essential for online entrepreneurs to secure business funding. Whether you’re setting up an e-commerce store, a blog, or are starting a company that offers online services such as web design, SEO or content curation, funding is usually necessary for your digital start-up to get off the ground. We’ve listed a step-by-step guide to successfully getting funding for an online business venture.
Weigh Up Your Options:
Before you apply for business funding, it’s important that you have weighed up all of your options and decided on the best one for you. Along with taking traditional bank loans into consideration for your business, you might also want to think about looking into business-only lenders, investors, and even crowdfunding campaigns in order to provide your company with the funding that it needs. Browse financial sites and comparison apps to find out more about the types of business lenders and loans available, and to achieve helpful tips and advice on securing your funding successfully.
Fine Tune Your Business Plan:
No matter which way you have decided to obtain your funding, a solid business plan is an essential tool to have in your kit. When you apply for funding from the bank, a business lender, investor or even crowdfunding from the public, your business plan will likely be requested before your lender(s) make a decision about whether or not it’s a good idea to part with their money. Because of this, spending some time on your business plan, having a clear future strategy in place and being able to clearly and assertively answer any questions from the lenders is crucial to obtaining funding for your company.
Check Your Personal Credit Score:
When it comes to applying for business funding, one of the main things that you must do is make sure that there is nothing which could possibly hold you back from getting the funds that you need. Unpaid debts from a long time ago could quickly come back to bite you when you are applying for a business loan or another type of business funding. If you have a very poor credit score, it’s important that you work to improve this before you apply for a business loan. If waiting isn’t an option, crowdfunding is often a very effective method for entrepreneurs who are unlikely to find funding elsewhere.
Pitch to Investors:
One of the best ways of getting funding for your start-up is through an investor. Often, investors are people who have owned their own business or businesses for a number of years and therefore are not only useful when it comes to funding, but also when it comes to giving you advice and tips for success. The downside of an investment is that you’ll usually have to share a cut of the profits with your investor(s), however, most entrepreneurs will agree that this is usually very worth it.
Ask the Public:
Lastly, crowdfunding, as mentioned earlier, can be used to fund all or part of your digital start-up. Crowdfunding is becoming more and more popular, and is a method of raising funds which involves asking the public for donations, which could also result in them becoming a shareholder in your company. Crowdfunding can be done in person, for example at shopping centers or door-to-door, however, it’s most effective when done online!
Are you currently in the process of getting funding for your online start-up? Tell us your story so far in the comments!