3 Ways to Self-Fund your Business
So you want to be an entrepreneur but don’t know where you can get the seed capital from? Start from yourself. Before you look outside at others, learn to place a bet on yourself and give self-funding a real chance to give your concept wings. Once you have evaluated how much financing you’d need, there are 3 ways in which you can fund your business on your own, without giving away any equity.
1. Bootstrap it with Personal Savings
Yes, it sounds more exciting than it is, but often this is the most accessible form of fundraising for businesses that are yet to hatch. Dipping into your savings in a planned, sensible manner saves you money (i.e., no interest) and provides security, though it does involve the risk to life savings. You can also think about selling existing assets to get additional liquidity. Make sure you’re accountable to yourself, maintain your ledger books and don’t spend more than you need to.
Government or public grants provide free sources of cash that are typically disbursed with the completion of specific milestones. Many of them are also designed to help scale small businesses by providing financial aid for setting up an organization. Research and study the grant options available for your business and start applying to them. These can provide a great way to manage the initial stages of growing a business, building a team and putting in place infrastructure, so you can focus on business development and acquiring more customers.
3. Debt / Revenue based financing
Consider getting a loan or revenue-based financing model which is a great way to support your cash flow as you grow your business. Many debt financing options exist these days such as Choco-up in Hong Kong that will assess your business potential and help you raise anywhere between USD 100,000 to USD 1 million. Don’t be afraid of loans and repayment, ensure you follow proper financial discipline and use the money for what helps generate the most income.