Finding Non-Traditional Funding for Startups

Finding Non-Traditional Funding for Startups

Small business owners everywhere struggle with keeping their head above water when it comes to finding funding. Most small businesses fail within their first year of business because they have run out of money to support their operations. This does not have to be you. Finding non-traditional funding is not easy, but when approached correctly and diligently, it will significantly pay off for the small business owner who is determined.

Here are 7 tips for finding non-traditional funding for your startup

1 – Know Your Market, Know Your Product, Find an Angel Investor

Non-Traditional funding is all about buy-in. You’ve got to breathe it for people to believe it. This begins with knowing your market, what is working and what is not working. Really research and understand the ebb and flow of today’s market. Low cost, high return and quick return is on the mind of all consumers. Make sure your business idea honors the consumer’s demand. Your first true attempt for buy in will be the consumer. After doing your homework, begin looking for an Angel Investor. Angel investors beat traditional methods of finding an investor since the Angel investor can also serve as a partner in the business. Angel Investors look for business owners who are passionate about their product and services. Land an Angel Investor and you’ve got it made.

2 – Find a Grant, Debt Free Funding Source

The first step to finding non-traditional funding is knowing how much funding you need and why you need. Many businesses failed because of their poor planning. Never take a trip without a map or GPS unless you have memorized the directions, and even then, sometimes you may need to take a detour. Get a map and do not move without a plan. When applying for funding sources such as grants, it is important that you make sure you have a business plan that demonstrates how the money you need will be invested and the return you expect to get back from it. Provide empirical data that supports why you think you will get a return on your investment. The hard core facts will get you grant funded. Drill down to the penny, giving each penny a very specific purpose. This sounds silly, but many businesses do not receive grant funding because they did not accurately project how much money they would need.

3 – Incubator Programs, A Multitude of Advisors is Key

After you have completed your business plan, if a grant is not appealing, simply go get help by finding an incubator program. Incubator programs are made up of experienced business owners who have been successful in their businesses helping owners of startups via consultation and training. These incubator programs do not only provide monetary funding but assets valuable to a startup such as an office space and equipment. The most successful businesses are the ones who have found advisors, consultants, fellow business owners who have repeatedly been successful and know what it takes to be successful. Incubator programs are great places to really get that hands-on help you need and find the funding you need.

4 – Friends and Family Funding

Don’t let pride get in the way of simply accessing the people who are closest to you and believe in you the most. Friends and family funding is the simplest funding source to acquire. One of the main benefits of this funding source is that there may not be a limit to how much you can borrow. Funding can be provided as low as $1000 and as large as $100,000 depending on the resources of your family and friends.

5 – Find the Right Group of People, Crowdfunding

This tip is extremely important, especially if you’re searching for a large amount of capital. Hence, it is important that you find the right people to fund you. Try seeking out crowdfunding. The funding method involves identifying a large amount of investors willing to give smaller amounts of money to your business. You reward these kinds of investors with offering free perks in using your business. You need people who are willing to take a risk. Find seasoned people who understand that value of longevity! Having trouble finding the people to ask? Start by finding your local chamber of commerce calendar and go to as many events possible.

6 – Ask for What You Want, Peer-to-Peer Lending

If you cannot find the right people locally, try Peer-to-Peer lending online. If you know your business idea rocks, go be a rock star, and get what you need to make it happen by submitting your application. The benefit of peer-to-peer lending is the low rates in comparison to bank loans.

7 – Ditch What Doesn’t Work, Find What Does Work, Prepaid Sales

The last tip is to be willing to change your idea how and when you make money. Try structuring your products and services such that customers pre-pay. Success is attainable if you are willing to adapt to change. Be flexible and do not give up. Success rewards the diligent and those entrepreneurs who are not afraid to start over or try new things.

About author

Michael Barry
Michael Barry 31 posts

Michael Barry is the Editor-In-Chief at AgeOfTheSmallBusiness.com. Currently living in Boston, Massachusetts, he received his B.A. in Financial Economics from St. Anselm College and his MFA in Creative Writing from the Stonecoast Program at the University of Southern Maine.

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