Starting your own business can be quite an intimidating experience. With lots of uncertainties up ahead, your only option to succeed is to brave the unknown. Knowing what you want to start and what you want it to become can help solidify your vision and strengthen your resolve. Using all the marketing tools available, meeting all the important people, and taking notes of what you should and should not do, you are ready to get started.
Then you find out you lack funding, or that you don’t have enough funds to finally get started. Does it seem like everything you did up to that point is a waste? It shouldn’t, and you shouldn’t worry, as the Internet has got you covered. The Internet has been funding start-ups for years and though many have failed, many too have succeeded and are now globally competitive.
There are two ways for people to gather funds on the Internet: first, you can e-beg for money from people. You can tell people what your intended products or services are, and you may even promise to give them some of those products and services in return should you succeed in gathering the necessary amount.
Then there are companies that lend money. These companies are fast sources of cash, should you really need it for an emergency. Most of these companies cater to businesses only, so borrowing money from them for personal reasons is discouraged.
Both methods have their own pros and cons, though they do work in their own way. What’s even better is that you may try and use them both to gather funds faster rather than just relying on one of them. The decision depends on what is more convenient for you.
First, let’s take a look at loans. Companies that lend money have varying prerequisites to be allowed to borrow money. But if you meet those prerequisites you’ll be granted that loan immediately, sometimes even as soon as the day after you get your loan approved. From here you are now tasked to pay the debt as agreed, plus interest. The advantage of loans is that you can get the funds immediately without too much fuss.
Unless your business returns a lot of profit, it is strongly advised to not borrow money from two different companies, however. You may find yourself with too much debt and that isn’t a good way to start a business.
E-begging isn’t fast and has lots of uncertainties, but this is a great way to gauge the audience who can be interested in your product. Only take this option if you have lots of time because this is definitely going to keep you busy.
Basically here you’ll be promoting or advertising your business while asking for funding. In return, successfully funded projects are to give something back to the people who funded the project, most of the time its the main product or service. The bigger the donation, the more things the donor gets. For years this model has successfully helped projects get funded and succeed. Many of them have become well-known. The enormous size of the Internet helps in this because you can target any size of audience. You can limit yourself to the city you live in, to your country, or you could even go for a global audience. With this, you can always find people who may be interested in your business and may agree to donate to you.
The disadvantages are as follows: one, you are at the mercy of the Internet. You don’t know how many people may be interested in what you offer. If there’s no one interested in your project, then you can expect little to no donations. On the other hand, should you actually find a huge number of people interested, you might have struck gold and can expect huge support. But this is very uncertain, and you’ll need to promote your project to friends and family and ask them to promote your project to other people they know. This isn’t a bad thing, but it makes this method really slow. And being slow could cause problems because some e-begging sites require you to set a goal amount and a deadline, by which the project must reach the goal amount, or the site shuts its down, calls it a failure, and returns the donations to the donors.
But suppose you get it funded before the deadline; you now have to make sure that the business succeeds and gives your backers the product you promised. Fail in that and you can expect not to be allowed this option ever again. And no this isn’t an exaggeration – the Internet will remember you and your failure.
This method might seem harder and harsher. But the beauty of it is that you can use multiple platforms at the same time. That makes your exposure wider as well and more people can know about you. The people who donated to you could also form your first customer base and if you succeed, you can expect bigger support for your next venture, should you choose to e-beg again. This is highly unlikely but considering they know you succeeded and have delivered, there’s already that confidence in you that if they fund you, you’ll keep your word.
That’s not to say that you should keep e-begging for your next ventures after your first venture succeeds. There’s a limit to how much you can ask them for money. But for a start, this will do, especially if you have nothing to start with except your computer. But hard work and perseverance can pay off. Loans are more recommended for funds that are used to expand an existing business. Asking for a loan when you don’t know if your business will succeed is suicide most of the time, so for first-timers, it is inadvisable. It’s like diving into a pool blindfolded.
But if you are just expanding your existing business, let’s say to another area, for example, then loans are your safest and surest bet to get funding.