Great ideas for businesses are plentiful. It seems that almost everybody has some idea for a product or service that has real potential to be profitable. The only problem, of course, is coming up with the money to develop it. Knowing the difficulty of that process, many creative minds simply dismiss their ideas and deny themselves the opportunity to become very successful.
If you are one of those creative minds, your idea doesn’t have to wither away like that. It is possible, in any economic situation, to generate the money needed to get your idea off the ground. It requires the same creativity it took to develop the idea in the first place, but directed in a new way.
Get your creative juices in motion and think money instead of ideas. Start with some of these strategies as the basis of the funding component of your developing business strategy.
Directing Your Tax Refund
Perhaps the best financial decision most of us make is to find professionals, usually local tax preparers, who can help us maximize our refund at tax time. The joy of seeing that large sum show up in our bank accounts often inspires us to splurge on a vacation or new clothes. This “wealth effect” often distracts us from constructive uses of the money, such as getting that new business idea put together and using it to build future wealth.
The main reason for that is that we naturally prefer immediate gratification, but it’s also because we know that plowing the refund into our business is less likely to yield rewards, even in the future. It’s vital to do a self-inventory at this point and decide if you really think your idea is worth the risk. If it’s not, go ahead and pack your bags for Cabo San Lucas. But if it is, don’t hesitate to try it. You might turn it into a venture that can benefit you for years.
The typical mechanism for funding a business with the investment capital of others is to get a bank loan or, in the case of an expansion of an existing business, to solicit investors or even to go public in the stock market. Those techniques are proven performers, but they aren’t always available to fledgling enterprises.
What you can do at that small scale is to marshal a group of smaller investments. If you need $100,000 to get going, don’t look for two investors who can provide $50,000 each. Instead, see if you can drum up 100 people to put in $1,000 each. Their investment is smaller, so they might be more comfortable with the risk. And since you’re not established yet, you’ll stand a better chance of making this direct appeal than if you had to go through the commercial lending department at a bank. This process is known as crowdfunding, and it has raised billions to help other enterprises.
One of the best things you can do to raise money for something you need but don’t have is to get rid of things that you have but don’t need. We can get hung up in the yard sale mentality of getting rid of clothing and outdated toys, but that’s not the only way you can generate some cash by selling things.
With the advent of online auctions and sales via social media, it’s easier than ever to sell things that would otherwise not have broad enough appeal to get sold. Stuck with unused ink cartridges for a defunct computer printer? Sell them online. Somebody somewhere still uses that model, and if it’s got some age on it, they’re struggling to find ink. They’ll be thrilled to find you, even if you’re hundreds of miles away.
Shake those trees and find the funding sources that can help you build your dream. Every successful business started with a big idea and a little cash. Once you’ve got the idea, find a way to get the money.