HOW TO FUND YOUR START-UP BUSINESS – It’s a mind boggling question for most people, I know. I’ve been there before. How do you even start a business with no funding available at all. You’re in luck. I’m here to give you 6 ways you can find the proper funding for your own business.
It can seem daunting, finding the funding to start your own business. It is a crucial part of getting your fashion start-up off the ground of course. Below are 6 ways you can fund your business dreams.
– Don’t quit your day job. When starting your own business, one of the most practical ways to do so is to keep your day job. At least for the time being. Start your brand small. Then you can test the market. When the time is right for you, it’s time to pass that resignation letter to your boss. While this approach keeps you busy, it’s partially stress-free as your financial situation is going to be stable.
– Do you have savings? If yes, then you can dive into your fashion dreams right away. If you do have a day job, you should consider quitting. Business is all about stepping out of your comfort zone. Use your own savings as your initial start-up funding. You can enjoy freedom now with both your creativity and time.
2. FINANCIAL INSTITUTIONS
– LINE OF CREDIT – An LOC works in a similar way to a credit card. You can arrange one through a financial institution. Usually a bank, who will then set a Line of Credit (LOC) with a max loan limit. You can now have access to funds from your LOC at any time. This makes it a viable and flexible option to begin with.
– FACTORING involves working with a financial institution like a bank. It provides you cash advance once goods are shipped and invoiced. This allows a company to receive a discounted payment sooner. It can create more within the same period while avoiding some cash crunching. When using this way to pay, use it to pay for the production of goods or costs directly related to products being shipped to the store.
3. GOVERNMENT FUNDING
– Government funding to fund your start-up business usually have certain types of funding schemes and loans that support local and start-up businesses across a variety of industries. For us, it’s PAGIBIG who provides loans like these, but of course there are certain qualifications you need to pass. This type of funding has some restrictions attached to how you can spend the money.
4. ANGEL INVESTORS
– Typically a wealthy individual who provides fund for your your start-up business during the start-up phase, usually in exchange for ownership equity and convertible debt. Typically their investment will decrease once the company is up and running. They can be your family and friends through their love and support for you.
They can also come in the form of linked businesses with your other business partners that you plan to work with that would want to contribute some sort of investment.
Also, it can come from private equity funds started by fashion industry executives. They could be a former CEO that look to invest in a small to mid sized fashion brand in their early stages.
– This provides a platform for designers to showcase and sell their products to their potential customers before production. This avoids product wastage while allowing the crowd to fund your brand during it’s start-up phase. Think Kickstarter.
6. JOIN CONTESTS
– There are a lot of fashion competitions that offer funding and/or press for their businesses. They target designers who have been working on their label for a few seasons. They also have some retail partners already, not to mention a strong and growing following.
In the end, funding is not all about finding money. It’s also looking for partners that are strategic, with industry experience and strong connections inside the industry. Money isn’t really a big issue when partnering up with an investor. It’s what they bring to the table to help your business grow altogether.
I’ve had good partners and I’ve had a share of bad partners. That’s been my case and experience of finding funding for my businesses. But the best ones are still those that I am able to fund 100% alone. Why? Because I have full control of what happens to my business. So be smart in your decisions and be logical at the same time. If your gut says it’s not a good one, it probably isn’t, and vice versa.
Question of the day: How did you fund your business? Or how do you think you will fund your future business?
Book your 1-on-1 coaching session with me here: Coach Antonio
TOPIC: HOW TO FUND YOUR START-UP BUSINESS