bumdel
Moderator
Capital is the engine of any business as it is needed for the efficient running of other factors of production as well as raw materials needed for any business organization. Without capital, no business idea or plan can come to fruition. However, the capital needed to start a business can be raised from the sourced highlighted below:
1. Bank loan
An entrepreneur can raise money to start his business from the bank. To stand the chance of being availed a loan by any bank, the entrepreneur must have a convincing business plan and tangible collateral.
2. Angel investors
There are many people (philanthropists) who are interested in financing businesses in the world and these people are regarded as Angels. The major requirement by Angels is a detailed and convincing business plan. Business capital can be gotten from such people. To know more about Angel, engage google search.
3. Online sources
This is an avenue of raising money to start any business. What an aspiring entrepreneur needs to do is to log on to such sites. They help in raising money worldwide and the money is sent to your domiciliary bank account. The advantage of this fund is you do not have to pay back at all and you can benefit from the scheme irrespective of your location. Many businessmen have sourced fund from this means and you can be part of these people. Examples are gofundme.com, shell-livewire.com.
4. Friends and family members
To raise the money needed to start a business, friends and family members can be approached for help. A trustworthy entrepreneur will be helped by his friends and relations and the conditions of repayment of such funds are flexible. It is always good to start a business with this kind of fund sources.
5. Cooperative societies
An entrepreneur who needs fund to start his business can join a cooperative society. Through this cooperative society, funds are contributed and pooled together and the entrepreneur can access part of the pooled fund to start his business since he is a member of the cooperative society.
6. Personal savings
An entrepreneur can save up part of his weekly, monthly or annual income in order to raise money to start his business.
7. Sales of assets
Assets which are not fully utilized can be put up for sale in a bid to raise money to start a business. For example, extra cars, machinery, buildings and so on can be converted to cash and the cash used as start-up capital for businesses.
8. Suppliers and customers
This applies to goods alone. An entrepreneur that has no fund to start and run his business can smartly raise fund from his potential customers. It works this way: assuming Mr. A wants to start selling cars and he has no fund to start his business, he can approach a potential customer that he has a car he is importing and that the cars cost NGN500,000. He tells the customer the features of the cars and what the customer gains by buying the car. If the customer is interested, he pays upfront and from there, he starts his business. Also, if he intends to sell edible goods like noodles, biscuits and so on, he can approach suppliers of such edible goods and take these goods on credit while he pays back as soon as he sells the goods.
9. Investment clubs
An investment club comprises a group of below 100 people who meet for the purpose of pooling money and investing the money. As an entrepreneur who needs to raise fund for your business, you can find an Investment Club close to where you are located and tap into it.
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