4 Ways to Fund Your Startup as a Solopreneur

While there are several different ways to fund your new business, many options are either expensive, require collateral (such as personal assets), or involve the participation and expectations of other people (friends and family loans, funding from angel investors or venture capital financing).

If you prefer to fund your own business ventures and leave investors out of the picture, here are four great alternatives for you:

 

Open a savings account

A great way to begin your business is to open a savings account. If you've already set aside funds to get your business going, use your savings account as a central location for all the money intended to start your operation.

Depending on your type of business, you'll need to set aside funding for legal expenses (such as trademark filings), building your online presence and any goods costs. You should always have separate savings account for personal expenses that may arise. Never use up all of your savings just to start a business.

 

Open a personal loan

Another way to finance your startup as a solopreneur is to open a personal loan with a bank. Because most traditional banks require collateral (personal property) to secure a loan and generally only offer short-term loans that require payback within a couple of years, a smarter option is to apply for a personal loan with an online bank that offers competitive rates

 

Utilize "buy now, pay later" programs

Another route to funding your new business is to outsource the payment of your sales. If you are running an online business, tools like Klarna or Afterpay pay your company for purchases made by your customers, while allowing your customers to pay in easy installments at later times. These types of "buy now, pay later" systems are especially helpful to your customers if your site has higher-priced products (such as high-ticket courses, luxury goods, or home furnishings) and it encourages them to place orders, even if they want to pay over time. These programs allow your business to have the money immediately, without extending credit to customers (which is a risk for any business).

 

Launch a Kickstarter campaign

And finally, the last method to inject cash into your new business is to launch a Kickstarter campaign. Kickstarter is a crowdfunding site that enables business owners to raise funds from potential customers and the people they know. It's also a great way to boost online visibility, increase brand awareness and test the viability of a business idea with real feedback at a very early stage.

Leverage your social media channels to spread the word about your Kickstarter campaign, this is the best way to get people to invest in your business. It also helps to build a sense of community and engagement around your brand, leading to customer loyalty, which will come in handy later on, when you launch the business.

 

and finally...

As you can see, there are a variety of ways to finance your new startup as a solopreneur without having to take on investors or partners. Depending on your goals and where you're starting, each of these financing options has its pros and cons. Do your research and evaluate funding routes as you plan your business launch.

 

Source: By Christina-Lauren Pollack (Entrepreneur.com)

 

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