●CAPITAL: How to Raise Capital for your Business
A lot of people looking to start a business are faced with the problem of raising the required capital for the business.
Is capital a big issue for the entrepreneur yes? Can it be overcome? Yes.
A lot of people have abandoned their business ideas because of lack of capital.
There are several ways in which you can raise capital for your business.
Let us examine some of them:
You can go into business with partners. Write a business proposal and look out for partners. If you have the idea but no capital, why not bring together a person or persons who have the capital and go into a written agreement with them. They fund the business while you take care of the execution of it for the benefit of all involved. This type of arrangement is mutually beneficial to all parties involved. The partnership doesn’t have to be for a lifetime, it can be for a period of four years after which it can be reviewed so you don’t remain at a disadvantaged position. Should you all decide to continue after the period has elapsed, why not, otherwise you share what has been earned with your partners as agreed and call it a day.
●Note: When you are a newbie please be a newbie until you rise and take your place. A lot of people take themselves too seriously, it’s a case of gross exaggerations of your skill or talent. I have seen people who missed opportunities because they felt the deal wasn’t fair, they felt cheated. Take musicians for instance, some of them are signed by companies who make more than them until they grew and earned their freedom. So when you’re starting out, don’t think “I can’t be cheated. I’m the one with the talent, I do all the work etc” and then you turn down offers because they’re not good enough for you. You may regret this.
Take Taylor Swift or even Whizkid for instance, the company that signed him made more than him until he grew and took his place. There are a lot of people with talents and skills but are nowhere today so be a newbie until you rise, don’t be petty, if you have to earn less to get partners do it, learn the ropes and grow to become your own boss. Attend shows and charge them for your worth but the story usually begins from a small start.
Learn and master the habit of saving money. If you’re in any form of employment, now will be the time to start saving a percentage of that money. Whether you plan to start a business or not you must save for your retirement, you must save for kids school, rainy days and unforeseen circumstances. You must save to start a business.
From where do you save:
* Save from your salary
* Save from your pocket money
* Save from your errand money
* Save from money given you for your daily meals.
* If you’re a housewife save from the upkeep money
* Save from tips and generous handouts.
🎈 Run errands:
A lot of people have raised capitals for their business through running errands for others. You can be a delivery guy for companies or shop owners and get paid for what you do. You can also start from your neighbourhood. Go from door to door. Offer to do something for them in exchange for payment. A lot of working parents don’t have time to take and bring their kids back from school. They don’t have time to wash their cars or do their laundry, why not enlist for a pay. If you’re unemployed, you can do this for a few months and raise the capital for your startup business.
Whatever you can do to reduce the load on people’s plates will put money in your pocket. Let go of miserable pride and work for your dream. There is dignity in labour.
🎈Relationship as assets:
You can raise capital for your business through your relationship with family and friends. Your social circle can be your asset. For instance let’s say your startup will cost $500 (#200000). Now you can make a list of how you can get this money. Have a breakdown of what each one can give you.
You can collect $100 each from five uncles or break it down to $20 or $50 each from 10 people, maybe 5 uncles and 5 aunties or 2 parents, 3 uncles and 5 friends. You have friends who are working. Friends who are in business and family friends and relationships. So while the money will be a huge chunk for one person to cough out, if you split the money to 10 places then you have a better chance of raising it from 10 people. Let them know what you need the money for, they will support you instead of having you leech of them all the time. If nobody in your circle is an asset then it’s time to change circle and change location as well, if possible.
Capital alternatives is another way of raising the cash you need or a substitute for it. This means you should identify first the need, then find an alternative for it. For instance if what you need is money for a shop to start your fashion business. An alternative way will be to go to someone who already has a shop and is in business and ask to start from a corner in the shop.You drop your machine, then as you sew you pay.
🎈Serve in exchange:
This has been a long practice in some parts of Nigeria and some parts of the world where a person serves for a couple of years as agreed in exchange for a huge capital. The good thing about this is that you also gain the experience you need for the business while in service. The duration of service should be decided by the parties involved as well as the stipulated amount to be paid after service. Paid internships can also help you raise some cash.
We will examine other means of raising capital in the next article. Click 👇on this link to join our Facebook group “Global Business Startups with Lilian Ohanedozi” and invite or send the link to your friends interested in business to join.
Watch this space and don’t miss it. Ask your questions and let us know if you value this article in the comment section.
🥂To your continued business success and growth!