How to Start Your Own Business When You Think You Can’t Afford To
There are many ways to secure funding. Use these tips to help jump start your business and live your dream.
Salesforce Canada
Perhaps the most intimidating part of starting a business is the financial aspect. Raising money before you have paying customers (or enough customers to turn a profit) can be a time-consuming, stressful process. Thankfully, entrepreneurs have a few funding options.
The first is to work with an investor. These individuals often ask for a portion of the company, stock, or a guarantee they’ll receive a percentage of the profits. Another option is to get a bank loan or a line of credit, which may not be available to all startups. If you have a partner or an interested customer, you can get an advance in the form of royalty payments, early licensing, or white-labeling agreements.
More popular options, especially in today’s market, are startup incubators and accelerators, as well as crowdfunding campaigns. Small business grants and community assistance are also available. Of course, some entrepreneurs can ask for funding from family, friends, or they can afford to self-fund their ventures.
No matter where you get your funding from, it’s important to pitch your product the right way. Find out how, and more about funding options, in the infographic below.
How to Start Your Own Business When You Think You Can’t Afford To
How to secure funding
- Work with investor
- Investor typically give you a specific amount of money in exchange for:
- A portion of the company
- Stock in the company
- Guarantee that they will receive a portion of business profits
- Before looking for investors, decide
- How much money you need
- How many investors you want to take on
- Investors can be found
- Online
- Through local business organizations
- Through family and friends
- Investor typically give you a specific amount of money in exchange for:
- Bank loan or line of credit
- This generally is not available to a new startup unless they have a:
- Good credit history
- Existing assets they are willing to put at risk for collateral
- In the U.S.
- Small Business Administrations (SBA) can get you infusions of money without backup requirements
- This generally is not available to a new startup unless they have a:
- Advance from a partner or customer
- Look for a customer or complimentary business that sees value in your idea
- To complete your development ask for:
- Advance on royalty payments
- Early licensing
- White-labeling agreements
- Join a startup incubator or accelerator
- Very popular and often associated with major
- Universities
- Community development organizations
- Large companies
- Many provide free resources including office facilities, consulting, and seed funding
- Very popular and often associated with major
- Crowdfunding campaign online
- Newest source of funding
- People make online pledges to startup during a campaign
- Small business grant
- Look at canadabusiness.ca for a directory of grant programs
- Government of Ontario offers young entrepreneurs up to a $5,000 grant for funding a business in Ontario
- Community Assistance
- Accelerator Center: Helps “tech entrepreneurs to start smart and build a great business”]
- Communitech: “Helps tech companies start, grow and succeed”
- Salesforce
- Salesforce for Startups
- Free Program
- Helps startups find the right Salesforce product and access resources to get started and grow quickly
- Has assisted 16,000+ tech startups since 2003
- Salesforce for Startups
- Pitch to family and friends
- Primary source of non-personal funds for very early-stage startups
- Professional investors will expect that you have commitments from this source to show credibility
- Self fund
- The cost to start a business is at an all-time low
- More than 90% of startups are self funded
- Business is yours alone
- Don’t have to give up any equity or control
- Present to the prospect’s challenges
- Don’t use your presentation to tell prospects about every benefit of your product
- Prospects care about how the product can address their challenges
- Let prospects interrupt
- Prospects will often show that they have a question or comment during the presentation in the form of an expression, be it;
- Verbal
- Gestural
- Facial
- When this happens, stop the presentation and let them speak
- Prospects will often show that they have a question or comment during the presentation in the form of an expression, be it;
- Keep it short
- Avoid rambling about your product for an extended period of time
- Prospects will lose interest
- Keep presentation as short as possible
- Focus on the most critical aspects
- Get lots of feedback
- After you make a key point about your product ask prospect for feedback with a questions like:
- “Does this make sense for your world?”
- “Could you see this applying to you?”
- Allows the prospect to give their approval or explain why something doesn’t make sense
- Getting the prospect’s approval begins to slowly close the sale
- When they tell you something doesn’t make sense it gives you the opportunity to adjust the offering to increase the likelihood of closing the sale
- After you make a key point about your product ask prospect for feedback with a questions like:
How to Pitch Your Product the Right Way
- There are many ways to secure funding. Use these tips to help jump start your business and live your dream.
Conclusion
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