October 21, 2019 | Mason Roberts
Funding your business can be a real rollercoaster. It can seem like you are trying to find a solution to your financial issues for a long period of time. There are many funding options where funding is concerned. As a business owner, you can look to traditional funding, such as banks, non-traditional funding, family, friends, investors. Really, anyone who has money to lend can be considered for funding, so long as they are willing. This is the tricky part. Convincing someone to lend you any sum of money, small or large, can be hard. More than likely, it will be. If someone were to ask you to borrow hundreds, or thousands, of dollars, you would probably need a bit of talking too. While someone may want to help you out, it is a responsibility that some may not want to take on normally. You may be looking for a lender who wants to see something different. Their aspirations may include helping struggling, aspiring entrepreneurs. After seeing so many businesses though, they may want to see something truly unique and different.
Many business owners have a habit of following guidelines that have worked for others. While it may help you, it can also hurt you. If, in your search for funding, you seem to keep getting turned down, make a change. Break some rules. Take an untraditional approach. If you are not sure which rules to follow, and which are okay to stray from, that is fine. Here are the most breakable business rules when searching for funding.
1. Take Some Necessary Risks
If you want to be a success, you may have to color outside of the lines every once in a while. Investors see the same business ideas, structures, and aesthetics time after time. The chances of them searching for something different are very high. Think of your business abstractly. Take your ordinary, general idea, and turn into something that will catch a customer's eye. Make it unlike any other. While you do this, though, it is important that it still remains profitable. While your investors may be looking for something new, they also will want the security of knowing they will get their money back, plus some. After all, this is a business transaction. They are investing in you, just as much as they are your business. They want to know your ideas and know that they can benefit from it just as you will.
2. Your Credit Is Not As Big A Deal As You’d Think
Where your credit history is concerned, it does not need to be impeccable. There are some lenders that tailor to this kind of issue. They know that business owners frequently get turned away by traditional lenders because of their credit standing, so they want to be the ones to save the day. This means, do not become discouraged because of your history. Always try to improve it, but do not let it stop you from taking opportunities as they come. There are so many lenders out there who are much more into your business idea than your current financial standing. If they think your idea can bring in capital, they may just overlook your inconsistency in your credit history. This is where an unstoppable business idea is really key. If you have a weak credit score, you should have a strong idea. This is something that will show lenders that your business can truly bring in money and customers. There will be some who will overlook everything else so long as you have a great plan. Seek them out, and you should receive the funding you need in no time.
3. Startups Are Risky, But Not Too Much
Yes, starting a business is not a sure thing. It will never be a sure thing. You can do all the tests you want, look over all the statistics, and still not match up once your business is up and running. Startups are hard, but they should not steer you away. When you are thinking if you should start a business and are nervous about the risk of startups, do not let that deter you. At any point in time, it is not guaranteed that your business will succeed, but there are better times than others to start one. Once you have your business idea, do your research on how the market is. Is it booming, has it slowed, or come to a stop completely? Whatever the answer is, it will have a huge effect on what your present to a potential lender. Have the answers to everything they could possibly ask you. If your market is at a slow pace, have an answer as to how you will turn this around in your business. Have plans for the day to days and months to months. Do not let the risk of a startup get you down. All you can do is figure out a way around this pressing issue.
4. You Do Not Need To Have A Solid Business Plan
Many business owners have the misconception that you must have a solid business plan to show lenders. They think that it must be written by points, sub-points, dates, the whole bit. This is not true. You can have a very general business plan. It can be as simple as presenting your idea and speaking of the ideas you have for it, such as where you want it to go in the future, and how you want to get it there. There are many business investors that may want to give their opinion. This can be difficult, but it can also be helpful if they are expired advisors. They may be looking for an entrepreneur who is open to ideas in helping their business become as successful as possible. Even if this is not the case, and the lender is not the issue, not holding yourself to such a strict business plan may be what is best. Having a goal, and making the tough decisions as you go may be your key to success.