Raising Capital to start a business is not an easy task, even though there seems to be a flow of options that someone can do. But the three most common are; Floating personal savings and sales of personal assets, entering the partnership and obtained bank loans. Each of these methods has the pro and cons of itself that must be analyzed before being posted.
1. Floating personal savings and disposal of personal assets
This might appear as the most effective, risk-free and feasible option. Here, you are trying to organize your business from anything you can get rid of for rainy days, hoping for a new business, whether it’s a small or global local business will sweep enough profits to keep you going. There is no interest rate for your own money and is easy to obtain. Unfortunately, unless you hold a very senior parastatal position and you have saved for a very long time; Your savings may not be enough to start you.
If you have some assets like a car and you really believe in your business ideas and see the potential in it, then you can sell it and float income generated into your new business. Entrepreneurs are advised to oppose sales of important assets such as housing houses. There is no guarantee that the business will take, and if it fails, you still need a place to rest your head.
2. Enter partnership
This is the second most common alternative to increase capital to install business. Two or more individuals contribute to the amount of money agreed upon and starting a business. The main pro using this model is that the contribution of each partner is very important because it helps meet the necessary capital easily. However, this comes at a cost. There is no room for independent decision making because all aspects of business decision making are collective responsibility. This might frustrate the decision-making process about things that must be done with business. Next, the profit must be shared. If you have to partner, connect with someone who shares the same interest.
3. Bank and microisters
This is a very sought-sought alternative. Many businesses have succeeded because the loans provided by the bank. The amount received can be as high as business needs and how worthy of its business. However, there is no business that applies to banks, loans are given. This is a tiring and complicated process that seems necessary forever. In addition, there are interests that must be paid, too bad if the business causes losses. Finally, loan requests can be rejected.
Depending on the nature of the existing business in the mind, the required capital and potential, one of the options listed must apply and allow you to increase the capital that is needed to regulate your business.