How to raise start-up capital for your new business

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eMade
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Location: Abuja
 

January 14th, 2012, 7:22 am

How do you raise the start-up capital for your business?

Are you thinking of starting a business today? The question of start-up capital is the next question and is probably the biggest problem faced by those who want to become entrepreneurs.
startup capital.jpg
To start with, launching a new business requires much skill and preparation. Entrepreneurs may not have the resources to raise capital in order to market their new business ideas; therefore, some great business ideas never become commercialized. This is a common dilemma that many entrepreneurs face. They often speculate about how to raise capital and same time, are unsure about how their startup will have the needed financial security to properly stay on track. Before a new business owner can raise capital for their startup, they must first identify the different sources of funding, find one that is most compatible with their needs, and then meet the given criteria of the investor or bank. These crucial steps can mean the difference between having the opportunity to successfully raise capital and leaving their new business ideas behind.

Personally, I’ve heard friends say that if only they had enough capital, they would really quit their jobs and put up their own businesses. Admittedly, I was also burdened until I made some researches and practically applied what I learned.
I’ve found out that there are actually many ways to do this. Some are easy and some are not. Some are quite obvious while some takes a little creativity and a bit of due diligence to make it work.

So if you’ve always wished that you had enough funds to start your own business venture, then I hope that these following ways can help you raise the capital you need to become an entrepreneur.

1. Personal Savings
Saving is difficult? I don;t think so. You just need to sacrifice some pleasures now. The most obvious way to get your start-up capital is to save money. Be prudent, live below your means and pay yourself first. The advantage of this method is that if your business fails, then you owe nothing to anybody and you have no financial burdens to worry about. No debt!
However, although this may seem ideal to some, it could take a long time before you finally have enough money saved to start. Recommended for those who are not in a hurry to start a business and those with very low risk-tolerance.

2. Friends and family (For Love and Money) :w':
It is a known fact that it is easier to get money out of people who love you or need you than it is those who don’t. Many business people are too proud to go to their parents, siblings, uncles or cousins for money to build their business. But wealthy family members give their money to total strangers all the time to invest with other strangers who may, or may not make them any money. So, approach a rich family of friend for assistance today. Quick interest-free cash!
:shkd: http://www.bestnaija.ng/viewforum.php?f=15

3. Liquidate Assets
Aside from digging into your savings account, you can also sell some of your assets. My father’s friend sold their old family car to put up a small photocopying center. Depending on the amount of capital you need, you could simply look around the house and sell whatever you have such as those tech gadgets and appliances, your jewelries and even some of your furniture or appliances.

If you have portfolio investments, you can ask your broker if you can liquidate some of your paper assets or withdraw from your mutual fund or time deposits.

4. Work For Extra Income
We often look for ways to earn extra income only when we are in financial need. What many people don’t realize is that, finding a second job or working on a sideline is a great way to raise capital for your dream business. Assuming that your current employment can cover all your financial requirements, then the profits from your extra ventures can all go straight to your start-up funds.

Going this route can be time consuming and exhausting but it’s relatively faster than just doing the two previous methods.

5. Take A Loan :shkd:
I know many people are scared of taking loans because of high interest rates. However, a personal loan is something you can leverage on especially if you are employed. Depending on your credit history and employment status, most banks are willing to offer these types of loan (salary loans) without much hassle and without collateral. Diamond Bank PLC offers such good loans.
Micro Finance institutions can also provide non-collateral personal loans to those who can present to them a sound business plan.

6. Government funding and the SMEs
Government loans by the SME administration are also considered a valuable source for new business owners who seek to raise capital. The SMEs hasve provided a resourceful means for several thousands of new business owners to raise capital.
However, before approaching the SME bodies as a source to raise capital, entrepreneurs should be aware that the SME does not lend money directly to new businesses, but instead, acts as a guarantor through a network of local lending partners to help promote the startup, growth, and success of small businesses. Since every new business is different and has its own specific monetary needs, entrepreneurs need to properly estimate how much capital will be needed for their new businesses. Some new businesses can be started on a small budget, while others may require considerable investment in inventory or equipment. It is vital for entrepreneurs to estimate this amount before deciding to raise capital through the government SME.

7. Co-operative societies/Contributions
These serve as another means of raising capital to start a business. Very similar to simple contribution among a number of people, you can easily get more than enough funds here especially when it is difficult to single-handedly raise the fund yourself. It is very ideal for people with regular incomes/salary earners. From https://bestnaija.ng/

Hoping you enjoy these. Please if you have other suggestions, add to this list. Thank you. :w':

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Merlino
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Location: Port Harcourt
 

January 14th, 2012, 3:28 pm

Especially I love that part that says For love and for money @
this will be a sweet way to get free money without life-choking interest rate.

[ m ]
My life is a puzzle...
J0E
Site Admin
Location: Texas
 

October 25th, 2013, 8:10 am

Good.
Humility is the first true attribute of a great man...
Guest

March 15th, 2014, 7:22 am

Advice to youths
I hear a lot of fellow youths say that there is no money to start up a business, but I don’t think that money is an issue in terms of starting up a business. The challenge I think they’ve got is lack of determination, because when I’m determined to do anything, I see myself moving forward. I tell my friends and anybody that care to listen that no matter how small you start up a business, it all depends on how strongly determined you are and how focused you are in handling the venture.

It doesn’t make sense to brag that you are a graduate, or beautiful or handsome when you don’t have knowledge and know your potentials. I say this because God has created everyone with talents and has given us two hands. So, what can you do? That is why I advise people to go and get trained. If you have problems not knowing what you want to do with your life, then go and learn handiwork. We have lots of them that are surviving with it these days in Nigeria. We young ladies going into make-up artists, some are going into fashion designing, instead of waiting for a white-collar job that may never come.
- Liet Nigeria
knightklone
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October 19th, 2014, 11:16 pm

The worst thing that can happen to a man is to be poor but still proud, to be very busy but still poor and broke, to always Pa
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JOEMANJOE
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March 12th, 2016, 4:05 am

Have you been seeking for Business Opportunities here & there to venture into or to add as an extra source of your income or Is your current online/offline businesses not satisfying you the way you expect?
Entlif
Newbie
 

March 29th, 2018, 12:13 am

Comprehensive write-up. Sure learnt something new
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J0E
Site Admin
Location: Texas
 

March 29th, 2018, 12:15 am

Entlif wrote:Comprehensive write-up. Sure learnt something new
:clap: :good:
Humility is the first true attribute of a great man...
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Deon
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Location: Some where in Nigeria
 

October 10th, 2020, 4:10 pm

knightklone wrote:The worst thing that can happen to a man is to be poor but still proud, to be very busy but still poor and broke, to always Pass Over Opportunities Repeatedly (POOR). All you need to re calibrate your financial destiny, increase your income or remain the way you are is to make a DECISION. ...
Are you telling me the truth
An eye for an eye left thousands blind,
remember that......
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ade22
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Location: eko ile
 

October 10th, 2020, 6:30 pm

In Nigeria, what real options do we have apart from loans? Loans are expensive
I am who I am...
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TitanKenneth
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November 30th, 2020, 1:37 am

:tu:
Follow me on facebook "Titan Kenneth".
https://mobile.facebook.com/profile.php ... speed_dial
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Meto1234
Senior
 

March 15th, 2021, 12:38 pm

Business for this life need determination and deligation
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Dube
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Location: Yola
 

March 15th, 2021, 9:20 pm

Nice write up
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green20
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Location: Rivers state
 

March 16th, 2021, 6:36 am

:clap: weldone ma
This article very nice
"We must use time wisely and forever realize that the time is always ripe to do right."
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