For many small business owners, accessing capital is one of the biggest challenges they face. Wouldn’t it be great if everyone with a business idea could pitch investors to get funding the way we see it done on TV? Unfortunately, angel investors aren’t usually interested in funding local service businesses. Luckily, there are sources of funds available.
Here are the options most service business owners turn to:
Apply for a small business loan from a bank or credit union
A small business loan can provide the funds you need to grow your business, but it can be difficult to qualify for a loan from a traditional bank or credit union. However, there are a few things you can do to give yourself the best chance of approval.
First, make sure you have a strong business plan, marketing plan, and financial projections. This will show the lender that you have a clear idea of how you will use the loan and how you will repay it.
Second, be prepared to offer collateral, such as property or equipment, to secure the loan. This will give the lender peace of mind that they will be able to recoup their money if you default on the loan.
Finally, try to build up a good relationship with your chosen lender before you apply for a loan. This way, they will be more likely to consider your application favorably. Your own bank, where you’ve held a long-term account, is probably the best place to begin.
By following these tips, you can increase your chances of being approved for a small business loan.
Crowdfunding
Crowdfunding has become increasingly popular in recent years. For small business owners, it can be a great way to get much-needed funds without going through the traditional bank lending process. And for investors, it offers an opportunity to support small businesses and earn a potential return on their investment.
There are a few things to keep in mind if you’re considering crowdfunding as a small business owner.
First, you’ll need to create a compelling pitch that outlines your business plan and why you’re asking for funding. Explain how your business will solve a problem in your community and make customers’ lives better.
You’ll also need to build up a base of supporters before launching your campaign. These supporters will include your friends and family, but can also include your future customers. in fact, a crowdfunding campaign is a great way to gauge interest among your target audience.
Finally, you’ll need to be prepared to give something back to your investors, whether it’s equity in your company or rewards such as products or experiences.
But if you’re willing to put in the work, crowdfunding can be a great way to find small business funding.
Ask family and friends for financial assistance
If you find yourself in a difficult financial situation, it can be helpful to ask for financial assistance from family and friends — especially if they know you to be honest, hardworking, and reliable.
This can be a difficult conversation to have, but it is important to be honest about your situation and explain how much help you need. Be sure to thank them for their help and offer to pay them back as soon as possible.
If you are unable to repay them right away, be sure to develop a realistic repayment plan so that they know when they can expect to be repaid. Asking for help can be tough, but with the right approach, it can make a difficult situation much easier to manage.
Invest your own money into the business
One of the most important things you can do when starting your own business is to invest your own money into it. This sends a strong signal to potential investors that you believe in your product or service and are willing to put your own money on the line.
When you have skin in the game, investors and bankers know you have a strong incentive to make sure your business is successful.
Of course, investing your own money is not without risks. There is always the chance that you could lose everything you invest.
However, if you do your homework and invest wisely, the rewards can be well worth the risks. So don’t be afraid to put some of your own hard-earned cash into your new business. It could be one of the best decisions you ever make.
Sell assets to raise cash
Sometimes creating something new means letting go of something valuable from your past. This could mean selling items you no longer need or want, such as furniture, jewelry, or electronics, to fund your new venture. Or, you could sell a more valuable asset, such as a car, boat, or property.
Of course, before you sell anything, it’s important to research the market value of the item so you can be sure to get a fair price. Once you’ve determined what you’d like to sell and how much it’s worth, you can start reaching out to potential buyers. There are a number of ways to do this, including online classifieds sites, community garage sales, or auction sites.
With a little effort and a bit of luck, you should be able to find a buyer in no time and raise the cash you need.
Barter services with other businesses to get what you need
If you own a small business, you may not have the budget to hire all the professionals you need. However, there is a way to get the services you need without breaking the bank: bartering.
Bartering is the exchange of goods or services without the use of money. For example, if you own a lawn care service, you could trade lawn care for accounting services.
Bartering can be a great way to get the services you need at a fraction of the cost. Moreover, it helps to build relationships with other businesses in your community.
If you are interested in bartering with other businesses, there are a few things you should keep in mind. First, never trade for services you wouldn’t have paid cash for — you’ll stretch yourself too thin. Good candidates for barter include legal help, accounting services, maid service to clean your offices, and mechanics to maintain your vehicles.
Second, make sure that both parties are clear about what is being exchanged.
Finally, be sure to put everything in writing to avoid misunderstandings down the road. By following these simple tips, you can use bartering to get the services you need without spending a fortune.
Chase your dreams
The right funding can help you turn your dream of starting your small business into a reality.
There are a variety of options available to small business owners who need help procuring funding. Whichever route you decide to take, make sure you do your research and understand all the implications before proceeding.
ServiceWorks software can help you get your small business started. The software is designed for field service businesses — like lawn care, appliance repair, or cleaning services. One affordable app lets you offer online ordering, optimize your routes and schedules, manage your customer information, and accept credit card payments.
Sign up now for a two week free trial, no credit card necessary.
