Do you really need funding?
I have started many businesses over the years and only a small percentage of these actually required any real form of outside funding. I am constantly amazed at the number of wannabe entrepreneurs who’s first objective is to get funding, when actually their first objective should be to get proof that they have a business and customers who want to buy their product!
Amazingly, for the majority of businesses, when they start getting traction and start to show progress in sales, it normally starts to create income, which so long as you have the basics right (earn more than you spend), you will begin to see that a carefully managed start up business may not actually need funding at all.
A business plan will normally dictate if a venture needs funding. The stage before this is the most overlooked stage and you’ll be amazed at what can be achieved with a careful approach to keeping your costs low, sailing a little close to the wind at times and striving to get a few sales under your belt first.
If you really do need to get funding, then try borrowing it first before looking to angel investors or other external investors. Investors love to see “skin in the game” and a sense of real commitment to a venture.
Before you approach an external equity investor, have you exhausted all avenues for personal funding yet? Have you maxed out your credit cards? Raided yours, your partners and your children’s savings account? Sold your prized possessions? Taken a personal loan? Borrowed from family and friends? If not, then why not?
If you are scared or worried about what might happen if you lose it all, well that’s just part of the game and you wouldn’t be human if you felt otherwise. It’s the reason that you are in business and an entrepreneur. You need to be confident in yourself and your own ability to get the business moving with your own resources before you can start to consider anyone else’s money to help.
On the other hand, there are many businesses that do legitimately need external funding for all sorts of reasons and if this is the case, then use everything possible to make that happen. Don’t assume that the main sources of funding will come from equity investors and banks. Despite what you might hear or read in the media, the world is awash with money and good businesses can always get funded, you just need to know where to look and which hoops to jump through. My big tip is this: Always remember, that if you don’t ask, you don’t get!