To start a business one needs an idea and a thought out plan but to put this idea into practice one needs capital. As education level is rising in women, more and more women are coming out of their home to make a career or start their own business. While starting her business, many women face the problem of acquiring capital. Part of the capital they arrange from family sources, but for the remaining part, they face the problem. There are many different ways one can fund her business. To ease her problem discussed below is how a women entrepreneur can fund her business and execute her plan.
It is one of the ideal ways to start your business. You can start your business without taking any external funds. You can tap into your personal saving and get started. Maybe in the initial phase, it will not be big, or returns will not be as expected. But once the business grows, you can plow back your profits back into the business.
- Family funding
If bootstrapping does not work in your case the next best option to secure funds for your business is through family and friends. You can tap into your internal source that is your family and friends. People close to you, when they listen to your business idea, they may be ready to fund your venture. They may give you money as a donation (to encourage you) or loan (the amount that is to be paid back later) or equity (partnership) in the business. The loan can be paid back later once the business picks up and is in motion.
Getting funds from the crowd (known and unknown people) who are interested in your business idea may be ready to fund you. On the internet, there are many crowdfunding platforms where you can run your campaign to receive funds. Many company owners who see your business an extension to theirs or like your idea, to encourage young entrepreneurs, are ready to crowdfund the project.
- Winning sponsored competition
There are many entrepreneur competition organized by government and private companies wherein you can showcase your product or service. The winner is entitled to prize money apart from getting sponsors, and investors. Note that your business idea should be viable and should have features that satisfy early adopters.
- Women based initiatives
There are many states as well as central government programs/schemes that encourage women entrepreneurs by offering soft loans, grants, and/or a variety of subsidies. Many banks also offer structured loan focused only for women entrepreneur and participants are entitled to loans at the discounted rate of interest. Out of the schemes available, many do not require collateral security against the loan. There are schemes which provide training to women entrepreneur by experts also.
- Angel funding
Angels are those persons who can help you with funds who are mostly high net worth individuals (or group) that mostly funds startups in its initial lifecycle in exchange of equity (partnership). The angel can also bring in his network of connections to help your business.
- Bank loan
Financial institutes and banks provide financial support to startups if they are satisfied with your business model. They also figure out if you can pay them back the loan that you have taken. They also take a look at your credit score before offering any loan. Most loans offered are term loan or working capital against hypothecating (mortgage) your business to them.
Above mentioned are few ways how women can fund their business and secure funds to give wings to their business. There can be many other ways of obtaining funds which you can comment in the comment section. It will help women entrepreneurs to stand up on their feet as an individual.