This depends very much on your chosen business and your expectations.
There are many different sectors where you could place your start-up, but the fact is that you have different costs for each sector.
For example, a start-up in unique cupcakes or organic shampoo’s will benefit more from good robust kitchen equipment and heavy-duty mixer, than a Mac Pro with I9 Intel, 64RAM and a graphics card of $1500.
An APP programmer will take more advantage of that last piece of equipment.
Either way, you always have to deal with different ways of collecting and spending money.
1.Own savings first
The most obvious option could initially be your own saved money.This can be any amount, but an absolute minimum of about $2,000-$ 3,000 is still realistic.
With this money you can fund your own website or other marketing and you can (probably) purchase the basic materials to process them to your final product.Again this 100% depends what business you choose.
Some people can start a business with only $200, but this is an exception to the rule.There is nothing wrong with a few thousand euros investing what you can possibly get rid of if you fail.
The nasty feeling that you get when you put your own money into a project can serve as motivator to get the bottom out of the can and consider your choices more consciously.
If your start-up ever grow into a mature and settled company, then those few thousand euros have been the best investment in yourself ever.
2.Strange money from Family & friends
A highly accepted and common way of collecting money to start your business is informing your parents, siblings, uncles/aunts and other family and friends whether they want to be part of your adventure.
Often it is not a difficult choice for family members to donate a portion of the total amount or to shoot as a loan or in exchange for a share in your company.Provided they can miss it and you with a solid plan for the day comes naturally.
Don’t see this as “free money”, because you’ll have to work for it just like your donors have had to work to give it to you.
Suppose: You need $10,000 to be able to fund your basic costs and investments.You expect this to be enough to cover all costs, and on top of that you expect that this money is enough to generate your first income.
What you can do is make $4,000 of your own savings and that you ask $3,000 of your parents or siblings as a gift or loan (at 0% or low interest).
The remaining $3,000 try to scrape you from other family members and friends.Of them, you can’t expect them to recover anything, so you can promise them interest in paying back in a certain timeframe.
Another more creative option is that you offer them a share in your business.
For example: Every $500 they submit represents 2.5% of your business.
That $3,000 represents 15% share in your company.
This share allows you to record as officially as possible on paper so that no misunderstandings can arise in the future, and you do not put your relationship with them at stake.
Don’t take it too lightly, because from this moment on you are not working for yourself, but also for your shareholders.All net gains earned in the future belong to them for 15%.
And rightly so, because they have invested in you and deserve a reward for them!
If your company fails, it is extremely annoying for the shareholders, because they have lost their money through your incompetence or disability.But, ultimately, they are responsible for their loss by investing in your disability.
Therefore, do not just approach every friend of your Facebook, but only approach the person with whom you have the most close relationship or who know you best.That prevents a lot of “bad-blood”.
3.Business Bank Loan
The bulk of entrepreneurs will have to deal with the big banks in order to budget their funding and get together.
Benefits of a business loan include:
-Access to (medium) large amounts from $10,000 to $250,000
-Access to knowledge and expertise of banking experts who have experience in your industry.They have access to a number of databases and reports that can help you to make a course of success.
-A realistic approach to your business.Bank employees will tell you things that your parents and friends don’t dare to share in order not to hurt your feelings.
Are you a bad entrepreneur?BAM, there is Frankie from Rabobank who told your glass hard in your face that he has no confidence in you and and your idea because (fill in reason).
A business loan can be a curse or blessing, depending on how your company performs.Can you not fulfil your loan obligations? Then you will be 100% VD time stressed and your business will not be able to flourish to how you had it in mind when you started.
If you always pay the loan back in time and you are a loyal customer VD bank, the possibilities for growth of your company are endless!
Do you need a ton for that new payment system?Fill in a form and expect the money on your account on Wednesday.
One invested from the outside, often called Business Angel or V.C. (venture capitalist) is a person or firm that invests a large amount in you, your idea and your company.
Solid experience as an entrepreneur is a requirement to get an investment in, as amounts often start at $50,000 and can reach many millions.
These individuals or firms have nothing more than their money, and they do not simply share these investments with everyone.These types of financing are for companies that are reinventing the wheel by being able to completely change an industry.
Suppose: You need $1 million to allow the (often already active) company to grow in such a way that you are prepared to give a large share to them.
With a large part we mean 15%, 25%, 40%, 50%.. Depends how good you are in negotiating.
The risk to you is mostly nil, and the responsibility for this amount lies entirely with the B.C.
If you fail, it hurts the B.C. (and of course you too emotionally).
A Boer and semi-realistic program that deals with investors and investments is “Shark Tank” on Netflix or online.Very amusing and based on real money deals.. But it is and continues to be an American production, so it is partially scriptween.
Financing is one of the most interesting aspects of a business, but also quite complex.This was just a very concise listing of some possibilities.
In short, go to yourself first “how much do I need to start” and then only think about where you get the money from.
Want to start small-scale and settle for less than a ton of income in the first years (income for your business, I don’t mean salary).Then start with your own assets or that of family & friends.
Do you have experience in entrepreneurship and are you going directly for the large-scale execution of your unique concept?
Then get started with creating an ultra specific and realtic Business plan and request a business loan from your bank or visit the different V.C. meetings that are regularly organized throughout the country.
Success with it!
As a start-up, there are several possibilities to get financing.A few are already mentioned like business angels and banks. But also think of: crowdfunding, SME credit and microcredit. You can find more detailed information here: Read all about financing forms for Self-employed professionals