You need to spend money to make money.
Tired as this cliché may be, it does hold a certain truth, particularly when starting a small business. Good news! Although it does involve some initial investment, launching a new venture or enterprise doesn’t take a lot of money.
Before considering options to fund your business, consider both the one-time start up expenses and the operating costs you’ll need to keep in mind. These costs represent the initial investment you’ll need to make.
Consider the various ways you can fund your business. These include, but are not limited to
- angel investors
- small business loans
- small business grants
One of these may be all you need, or you may wish to combine funding sources. Alternatively, if you wish to use as little investment capital as necessary to start your business, consider bootstrapping.
One way to fund your small business is to ask the general public for donations and monetary support. Crowdfunding is a form of microfinance: unlike peer-to-peer lending, you’re not required to repay donations received. As an added benefit, crowdfunding offers a powerful way to raise money while growing a customer base among people already interested in your product or service.
Enticing as crowdfunding may be, you need to understand its mechanics. Crowdfunding campaigns require careful planning, strong marketing, superior service and flawless execution. You’ll need to choose a name for your campaign, develop a crowdfunding video and plan your marketing budget. If you’re considering rewards-based crowdfunding, think about the rewards you’ll offer to motivate donors to continue backing your campaign.
Still unsure which option is best for your small business? The knowledgeable team at Lift Legal can help you consider each of the options and create a thoughtful plan to set up the capital you need.
Contact us today to learn more.
The information on this blog and website is provided by Lift Legal for educational purposes only. It is intended to give readers a general understanding of the law, not to provide specific legal advice. Information contained in these pages should not be used in place of competent legal advice from a licensed, practising lawyer in Alberta. Furthermore, by using this blog and website, you understand that no lawyer-client relationship exists between you and Lift Legal.