Creative funding for startups
There's no doubt that COVID-19 has had a significant impact on small businesses. But contrary to what you may think, now can actually be the perfect time to start a new business. Armed with the right tools, you can start down the path from business idea to successful startup. Follow our 16-week series to gain all the insights you need to Start a New Business Now.
Here’s a sneak peek at what you’ll learn in Chapter 3.
You have an exciting business idea and a plan to bring it to life. Now, you need to raise funding to get your startup off the ground. But how much money do you need, and where will you get it?
You’ve probably seen headlines about multi-million-dollar seed rounds and mega Series A, B and C investments. Though such transactions make major media splashes, they’re not the reality for most small businesses. In fact, the average startup requires around $10,000 in capital – and one-third of small businesses start with less than $5,000.
Whether you need $5,000 or $5 million, you need to know where to find funding for your small business.
In Chapter 3 of How to Start a Business Now, you’ll discover:
How to calculate your startup costs
Calculating your startup costs is a critical step, especially when you consider that running out of cash is the second most common reason startups fail (right behind no market need).
It can be tempting to try to operate on as little cash as possible. Some entrepreneurs might believe that the less money they ask for, the greater their chances of funding approval. However, lenders are more likely to lend to startups that understand how much money they need and know the best ways to invest it than startups trying to scrape by. Though there is merit to operating a lean business, you must have ample cash to succeed. Lenders understand that.
The only way to be certain you have enough funding is to do your homework and accurately calculate startup costs. Chapter 3 of How to Start a Business Now shows you how.
Follow our three-step process to determine exactly how much money your startup needs to get from launch date to profitability. Then, determine how much you’ll need to stay in business for two to five years – the average time it takes for businesses to become profitable.
8 ways to fund your business in an uncertain world
Once you know how much money you need to start your business, you need to find funding sources. Chapter 3 of How to Start a Business Now details eight ways to fund your business, plus offers important tips you need to know about each funding source. Use it to compare:
- Small business loans (and why you need a strong business plan)
- SBA loans (and how they work)
- State and local government loans (and where to find them)
- Nonbank lenders (and they use algorithms)
- Venture capital (and how to pitch during a pandemic)
- Crowdfunding (and the best platforms for businesses)
- Grants (and where to find them)
- Bootstrapping (and how to self-fund your startup)
At the end of the chapter, you’ll complete a business budgeting worksheet that will help you determine exactly how much money you need to get your startup off the ground and keep it afloat until you’re turning consistent profits – the hallmark of small business success.
Funding your business is a critical step toward realizing your dream of entrepreneurship, and it’s one that requires precise research, diligent attention to details and accurate projections. Make sure you have the funds you need to succeed with How to Start a Business Now. START TODAY.
Toolkit: Coronavirus (COVID-19)
Stay up-to-date on ways to advance your business during the outbreak.
Subscribe to the Toolkit
Get tips to keep you, your employees and your business going
Keep your business moving forward
Blog Small Business
There’s never been a better time to start a business. COVID-19 has created opportunities in new markets and the eBook How to Start a Business Now, guides you through all the steps necessary to ensure your businesses success.
Blog Small Business
October 1st marks the beginning of National Breast Cancer Awareness Month and COVID-19 has created a new challenge for fundraising. Read this blog for tips and products on how to boost donor engagement in the new normal.