6 Simple Ways To Raise Funding For Your eCommerce Startup
The eCommerce community is growing day by day. This has made opening a new business much easier than ever before. However, with everyone trying to secure a place in the market, the competition is huge. Although theoretically speaking, setting up a business today is easy and does not involve too many complicated steps, the major struggle is to keep up with that business. eCommerce startup funding becomes one of the major problems that businesses face.
Getting large funding all at once is not very easy. And that is why people resort to multiple ways of raising funds. This way even if they get small funds from different places, they can still pool the money together and use it. If you too are looking for your eCommerce startup funding, you might want to consider some of the ways that can help you raise the money you need.
There are several simple ways to raise funds for your business.
Bootstrapping refers to using the capital saved by you as your eCommerce startup funding. Bootstrapping is one of the safest and secure ways of investing in your business. Many business people look up to others for investment instead of contributing themselves. This can delay your startup. The idea is to use your money to initially set up the company and once it is moderately out in the market, you can approach other people for funding. This also gives the impression that you have faith in your business.
It is one of the most commonly used methods of eCommerce startup funding. Crowdfunding, in plain terms, is to get money for your business from different people. Several people make small contributions and then all the money is pooled together. Generally, when people invest in your business, they expect a return when your business grows. The return expected can either be equity, products, or services. This kind of funding gives you more freedom when compared to a chunk investment from a particular entity.
If you are a newbie in the field of entrepreneurship, a mentoring program could help you navigate your way through the market and its trends. This can also be called an indirect investment as you may get to meet a lot of investors in the course who are willing to fund your venture. Besides that, you can also access tools and expertise that will help your project grow.
Ask from Family and Friends
You can also ask your relatives and friends to contribute to your venture. Although it is a very informal way to pool eCommerce startup funding, it can work well for some people who have family and friends they can rely on. One in every ten eCommerce startup funding comes from close ones.
However, it is imperative that you have a good business plan. This will help them grow confident in your venture and only then will they contribute. Besides, if you belong to a business family, you can gather some ideas. Repayment is also flexible in this kind of funding.
A young entrepreneur, more often than not, considers business loans. If you can lay your hands on a scheme that comes with low interests and flexible payment options, nothing like it. Several companies and banks are willing to fund new business ventures provided that they are authentic and have some future. Loans are often easy to get and you can borrow a large sum at once. And when your business gets on track, you can repay the loan. It works great for businesses that need huge capital to start rolling.
Another advantage of business loans is the fact that you can have the luxury of repaying them over a long period. It gives the company the time to get on its feet and as your profit increases, you can conveniently clear your debts.
Venture capitalists invest in businesses that have the potential for high growth. They buy your equity and wait for the business to expand and bring in profits. VCs are generally not very easily impressed and only if you have a solid plan and idea will they be interested in funding. This can give you a great start but it is not as flexible as crowdfunding and may also infringe your freedom to some extent.
You can find such VCs on social media who are willing to interact with entrepreneurs and wait for the right idea to come their way so that they can fund the venture.
eCommerce startup funding is perhaps the toughest part of getting your business started. Once you have bagged a sufficient amount, there are not many obstacles that can hinder your growth, provided that the idea behind your business is a good one. However, no matter whatever ways of funds you choose, make sure that you know enough about the terms and conditions that come with them. Besides third-party funding, you must invest some of your own money. While that may have risks, it also comes with a lesser burden.