Six Ways to Raise Money for Your Business

One of the most difficult parts of being an entrepreneur is raising money for your business. Statistics state that 40% of young businesses or start-ups fail as a result of bankruptcy. This means you will need to learn how to raise money for your business, or else you are at risk of failing in your business venture or start-up, even if you have innovative and brilliant ideas.
We’ve written this article to show you a few ways you can raise money for your business:

Bootstrapping is a situation in which a business person funds a business using his finances as capital for their business. If you have no idea how else to raise funds, a good place to start is with your personal finances. This means selling your assets, taking out a mortgage, or pulling money from your savings.
Product Pre-sales
It would be a great idea to offer your customers the option of pre-ordering your products before it hits the market; this way, you raise the money that you need to fulfill the orders and you get to gauge what the demands for your products will look like once they hit the market.

Social capital is simply valuable close relationships that you have successfully nurtured, it could be close friends, family, relatives, colleagues, neighbours, classmates, or even church family.
They are most likely going to listen to your business idea and support you, compared to complete strangers, and they will be your biggest fans.
The popular Chinese billionaire, Jack Ma, started Alibaba with this exact strategy. He gathered 18 of his friends in his tiny apartment and pitched his business to them. He was able to raise $60,000 with which he started Alibaba. Today, Alibaba is one of the biggest e-commerce establishments in history.
This can be tricky, however, because you will need to be able to excellently pitch to your close friends and family. Plus, you have to be careful not to disappoint your close friends and family by wasting the money they have sent to support you.

Partnerships

Another way to raise money for your business is finding a partner with money who will be willing to collaborate with you. It could be that they do not have as much time even though they have the money, and you have the ideas, skills, and time.
With this partnership, everyone in the equation wins. It does not have to be just one person, you can find several people like this and pitch partnerships with them. Iroko TV’s founder, Jason Njoku, was able to raise funds with this strategy.

This new finance way has especially been harnessed with groundbreaking fintech innovations like GoFundMe. You can ask every single person in your life to give you just ₦1,000. Depending on what kind of business you plan for, if you ask ten people for ₦1,000, you may be able to raise at least ₦8,000. If you ask 50 people for ₦1,000, you have at least ₦40,000. If you ask 100 people for ₦1,000, you might get at least ₦80,000. Of course, it doesn’t have to be just ₦1,000, they can give more.
You can also use platforms like GoFundMe to create crowdfunding campaigns. Tomato Jos, for example, raised $55,000 on Kickstarter.
Find Grant or Loan Opportunities
There are government and bank schemes and initiatives that offer low-interest loans, grants, and subsidies for businesses. For example, there is the Anchor Borrower Programme in Nigeria for agribusinesses.
We hope that you found this helpful. If you did, do not hesitate to share. To get more business tips like this, subscribe to our email newsletter.