One of the deadlock most investors meet when about to start a business is lack of capital. With the business ideas among the youths in Nigeria, it is very unfortunate that lack of funds would be the killer of their ideas.
Getting funds to finance your business idea could be a challenge to say the list, but as daunting as it may seem, it is something every potential business owner must face.
Below in this article, we would be discussing the different methods of getting a capital to start your business. With that been said, let's begin.
Getting funds for your business.
1. Save Up For Business
Saving from time to time could go a long way in financing your business. Even if it is a little amount you save at intervals, it would amount to something as time goes on.
When you get the idea of the business you intend to start, you should start saving from then. Manage your finances well and keep some money for savings, it would be surprising how much you would be able realize at the end of your saving period.
2. Source For Funds From Family And Friends
This is not an alternative every one would love to try but it is one of the most easiest way of getting business funds. Even I myself don't fancy the idea of telling my family or friends about my business plan. But it is something I must do to get their advice and money (when I need it), and they've liked my ideas the few time I have told them.
Tell your family, relatives and friends about your business idea, show them your business plan and CAC business registration to show how serious you are. They would support you if you are able to convince them enough and they buy into the idea.
3. Seek Partnership
Another way of getting money to float your business idea is to go into partnership with other people. You can meet with someone who has the financial ability to fund your idea. The person brings the money while you bring the business plan. In some cases, you and that person can both fund the business idea, it makes it more easier. Also, you can have multiple partners.
You might be thinking, how do I get partners? You can partner with a family member, your friends or co-workers. You can also run an advert online and offline, seeking for partnership.
4. Take Business Loans
A loan can also come in handy when sourcing for business funds. You can request for a business loan in Nigeria to kick-start your business or fund it half way. But you have to be very careful when taking loans.
Not every business owner is very keen on getting a loan because it represents debt that must be paid in time with interests. However, many business get loans and have been able to pay up easily.
If you are interested in taking a business loan you should know that you might be requested to offer a collateral, which could be your business itself. You can read this article to understand how to get a business loan in Nigeria.
5. Crowd Funding
Crowd funding is also a good way to get business capital. Through this way a lot of million dollars worth of businesses have been started and are still operational.
What you do is find a crowd funding website like Kickstarter, post about your business idea and goal, then propose how you intend to achieve it. People who buy the idea would put some money into it.
It is not a must you use the website, you can also post something similar on your social media handles, you could realize some funds through that.
Depending on the agreement, the people who crowd fund the project could get some shares or it could be a donation.
6. Business Grants
The government as well as private institutions give grants to entrepreneurs to help further their dreams. Grants and loans are both money received from government or private bodies, but while loans is to be payed back with interests, grants aren't payed back at all. Free funds right?
The government has a lot of grant schemes like FG Grants For Agriculture, YouWin Connect Nigeria, Lagos State ETF, and other schemes through the Bank Of Industry.
On the private side, there is Tony Elumelu Entrepreneurship Programme (TEEP), Diamond Bank BET Programme etc.
And there you have it, the different methods with which you can get a capital for your business. Sourcing for money to start a business has never been easy, especially in this present Nigerian economy.
And you should understand that banks wouldn't want to loan a business that hasn't been in operation and even if it is already operating, there must have been some profits realized. This is done by the banks to ascertain that the business has the means to pay back.
If your idea is very good and appealing, you can source for funds from friends and families. This remains the best way to raise capital.