Funding for any small business is challenging. Though, it can be daunting to ask for money when you know you’ll be running the entire operation from your domicile. But I’m here to tell you to get that thinking out of your head! If you’re not spending money on office rent or paying a large number of employees, there’ll be less money to borrow, and, ultimately, less money to pay back.
Here are four ways to gain the funds you need to open up your at-home business:
Put a lot of thought into your business plan.
Just because you’re not in a formal office doesn’t mean you get to draft up a casual business plan. Investors will always feel more comfortable giving money to a strong, well thought out business plan. A reasonable investor shouldn’t care about the type of office you’re in, they should be concerned with your short-term and long-term goals, and how you plan on meeting those goals. Just do a quick Google search for “Business Plan Templates” and take your pick. Fill it out thoroughly, and give it the time it deserves. Not only is a good business plan a great tool for gaining investors, but it's also an excellent tool for keeping you as the business owner on track and striving for your starting goals.
Ask for favors where you can.
Unfortunately, as every small business owner knows, starting a business means asking for favors where you can. That means reaching out to friends, family, and old school or work colleagues for investments. Part of owning a business is selling yourself and continually putting yourself out there, so practice your elevator pitch. If you believe in your vision and your small business in general, pitching won’t feel so painful. It’s an investment, not a handout. Though, if you want to involve as few personal investors as possible, find the right small business-friendly bank to take a loan out from.
Crowdfunding has grown enormously in the past few years. Crowdfunding is essentially the funding of a venture or project through raising money from a large number of people over the internet. Thanks to sites like Kick Starter and Go Fund Me, just about anyone can gain a platform for raising money. Some crowdfunding users like to offer their investors prizes or incentives to donate. This could be anything from coupons to your new business to a sample of your products or services. Just remember that once you make your crowdfunding page, it’s up to you to get the word out. Post the link to all your social pages, and encourage your friends and family to share. With an incentive program and the power of social sharing, funding your small business is entirely possible through crowdfunding.
File your business.
Lastly, file your at-home business. Not only do investors feel comfortable loaning their money to an incorporated business, but customers also feel comfortable giving their money to an incorporated business. When you incorporate, you also have the option of gaining support via shareholders and the ability to sell shares down the road. You can also raise capital and offer stock options to your employees. Not to mention, down the road, incorporating also saves your business when it comes to taxes. Just be sure to weigh your options when it comes to choosing the right entity for you and your at-home business. A couple of popular options are LLCs, Corporations, Sole Proprietorships, and Partnerships. Consider your entity type when drafting your business plan, and definitely communicate your filing intentions to your potential investors.
How did you fund your work-at-home business? Drop us a note we would love to hear from you!
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Deborah Sweeney is the CEO of MyCorporation.com. MyCorporation is a leader in online legal filing services for entrepreneurs and businesses, providing start-up bundles that include corporation and LLC formation, registered agent, DBA, and trademark & copyright filing services. MyCorporation does all the work, making the business formation and maintenance quick and painless, so business owners can focus on what they do best. Follow her on Twitter @mycorporation.