You may have a startup idea, but now you are still studying or have just graduated. The main problem of beginning your business is having no money to realize this idea. But you should also keep in mind the mistakes any startup should avoid. This guideline is created to help students with lots of small business ideas, but no money for their realization. Here you will find a list of recommendations on how to get your idea ready for attracting financing and sponsors.
Part One – Prepare
Your idea might change the world, but now your main task is to convince people in this thought. You definitely need to have a business plan to make your business organized and show that it has potential. It’s essential to explain to the investors that you understand how to develop the idea, but not only have it in your dreams and unrealistic plans. Then it’s also important to make a presentation. These documents need to be realistic to attract investors.
You should also think about creating a corporate structure, as most lenders have definite legal challenges financing individuals. Then don’t forget about an accounting system that is just necessary for any financial transactions.
Part Two – Searching For Funding
Now you can start a real search of people who could be interested in realizing your idea. You have approximate calculations of your future expenses, so you can determine what funds you need. Before continue reading you should accept the idea that you will probably not attract venture capitals at once. You should be prepared for hard work using all available resources. There are at least 5 ways young entrepreneurs can finance their businesses.
Bonus article: Professional Advice on Finding Money for Small Business.
You can apply for a special lending program created by the SBA (Small Business Administration). This agency specializes in funding small businesses and startups. You can get up to$50,000 for your startup. According to definite requirements, it’s recommended to take business classes and consult with their counselor. This should be considered as extra advantages of this program.
You should understand that it’s quite challenging to get a short term business loan for a student. You have no financial background and most lenders will not deal with you. However, you can attract some private lenders. Pay attention that in some cases you need to provide some equity that can be used as collateral for your loan. This is quite a risky case, but you can ask your parents or friends to be your co-signers. In case your business develops, you will create a great payment history from the beginning.
According to basic requirements, you will also need to prove your stable income. Some students can really do that, so this variant is quite realistic.
Business Plan Competition
It’s a great chance for students to find the necessary money. Most universities hold such competitions where students can present their business plans. It’s not just an opportunity to get money, but also a chance to get feedback, recommendations, and critiques. Experienced financial judges will help to make your idea more real, even if you will not be a winner. Pay attention that there are specific rules in these competitions, so you need to prepare. Learn for more detailed information to get your business plan ready for a competition.
It’s worth mentioning that you can use your own money to begin your project. Of course, you have to consider all the risks. However, this step can help you to attract other investors who will see that your money is also involved. Also, your relatives or friends could be interested in your idea. It’s not the best step to deal with family members, but you can make an agreement to meet all requirements.
You should also consider the other sources for financing your small business. The main task is to have a great business plan to explain the investors your idea can be realized. It’s up to you to make your dream come true. Now you just need to convince the other that it’s real.