“It takes money to make money,” was a business adage I seem to recall rolling my eyes at as a college sophomore.
Well turns out, that while it doesn’t take millions of dollars to get a business going, it does require some resources.
But Hannah – I’m broke!
If you’re a like most millennials post-Recession, access to hundreds of thousands of dollars isn’t exactly something you have as an option…
I’ve been there too.
Not only do you need funds to get your business idea off the ground, but you also need some cash (also known as “working capital”) to keep your start-up afloat for the first few months of operations.
Here are six financial resources for today’s millennial entrepreneur:
Have an old college roomie that’s interested in starting a business?
Maybe a fellow disgruntled co-worker or industry professional that’s ready to take a leap?
Consider structuring a partnership.
Bringing in business partners (equity in exchange for funds) can be a great way to raise start-up capital for your new idea. Need help finding potential partners? Check out the database on AngelList.
Think: Shark Tank.
Angel investors may be interested in being a silent partner in your company, in exchange for equity (ownership). Contact your region’s economic development director, area start-up incubators, and entrepreneurship organizations to identify potential angel investors. Consider reaching out to your regional Small Business Development Center’s Consultant and request their assistance in identifying investment opportunities specific to your region.
Every little bit counts!
Assess your own personal finance situation, and get ready to “put some skin in the game”! Personal savings, credit lines, and liquidated assets are all fair game. Take inventory of your personal assets and decide what you can part with to launch your company.
Word to the wise: don’t invest more than you can afford to lose. Start-up cash flows are difficult to forecast; keeping personal savings on reserve to help “keep you afloat” throughout the sparse seasons.
Crowdfunding is my all-time favorite way to raise start-up capital. Test your concept, build a following, and raise funds – it’s a win-win-win! This community oriented funding approach is rapidly taking the place of traditional business financing, providing entrepreneurs with a viable opportunity to not only raise startup capital, but also establish a customer base before they even open their doors!
Check out a few of the more popular crowdfund platforms: Kickstarter and Indiegogo.
Want to get financing for your business that you don’t have to pay back (don’t we all…)? Check out grants!
Depending on your industry and location, your start-up may qualify for grants. Two of the most popular private-sector grant programs in the United States are the FedEx Small Business Grant Contest and Mission Main Street by Chase. Other places to find out about grant resources include: Federal grant database and the Small Business Administration
If you’ve got good credit and assets for collateral, commercial lending may be a good option for you. Most entrepreneurs go through local bank lending; but there’s a variety of small or microloan options available for today’s entrepreneurs.
Check out these commercial options:
What’d we miss?
Did we miss any financing options?
Please include your favorite financial options for today’s entrepreneurs in the comments below!