Lesson 3: Assess Where You Are – 6 Ways to Fund the Next Step in Your Business
When you’re evaluating what’s next in your business and the vision you have for your life, you will often require resources. Financial considerations are an important part of any step you take, but while there’s often conversation about “billion dollar companies” and “unicorn founders”, not every business requires the same resources. There are many different ways to make your next step a reality.
What matters is that you have visibility and transparency into where you’re at and what options you have. We’re going to get to the first part of the equation in this lesson’s worksheet. Below, you’ll see some ideas and examples for how to fund your business goals.
Crowdfunding – Platforms like GoFundMe and Kickstarter allow people who are loyal to your business, idea, or mission to contribute to your goals. Backers give money in order to bring your product or launch into the world, and they often get something in exchange, like access or rewards. Crowdfunding works if you’re willing to be a marketing machine or already have a loyal audience built in.
Trade – Everyone in business has something they’re skilled at and thus something to give. Maybe you’re great at social media but need help with contracts. You can trade your social media service with your lawyer peer who’s having a tough time getting a social following. If you need some help achieving the next step of your goals but don’t have a ton of resources to dedicate to the effort, consider doing a trade with someone who is in a similar scenario.
Working Capital Loans – Working capital is the money needed to cover the expenses that enable you to expand. It’s the money you need to take an already established business one step further. Many banks and services will give out business loans in order to make your plan a reality.
Friends and Family Money – Many great ideas have started with the money of friends and family. While this isn’t an option for everyone, if it’s available to you it might be a route to consider if you have a solid plan for where their money would be invested and what their returns could look like. There’s no one right way to follow this path so do some research, talk to others who have done it, and see if it makes sense for you.
Bootstrapping – This is a pathway that simply means you’re using your own money to make things happen. If you can do this, it’s a great way to go because you’re in full control of what’s happening. While it does carry an obvious risk, bootstrapping is great. It does however require that you have a good sense of both your business and your personal runway to ensure that you’re able to invest what’s needed.
Venture Capital – If your business has high start-up costs or your next step toward expansion in an already established business is actually a giant leap, venture capital can be a great option for funding. You’ll have to give a piece of your business away in order to get this type of money, but it’s a smart pathway for anyone attempting major scale.
Angel Investors – Individual Angel Investors, or Angel Investing groups can be a good solution if you need more capital than you can bootstrap, particularly as there are an increasing number of angels focused on getting capital in the hands of underfunded demographics or sectors. There are also quite a few angel investors who consider themselves “impact investors” who are focused on companies that drive social good.Download the Wordsheet PDF