Many aspiring entrepreneurs complain that they don’t know how to raise capital for business. This post will help you on how to raise capital for business in 2023.
The truth is, for you to make a business idea a reality, money must be involved.
That’s the fact.
Probably you have read so many articles on the internet stressing how to start a business with zero capital. But I tell you, in a proper sense, you need capital.
You cannot tell me you can start a blogging business without money or a cleaning business without money or laundry services with zero capital.
That’s not possible because
- For you to start a blogging business, you must buy a domain – which costs money
- For you to start a dry cleaning business, you must buy an iron, a washing machine etc.
- You need a business location which requires money.
However, now you have that perfect business idea with properly laid down strategies on how to succeed. You will have to put in money to make it happen.
This is the point where most aspiring entrepreneurs give up.
First of all, let’s get to know the definition of capital.
What is Capital?
Capital in business terms is defined as the money needed to start up your business or produce goods and services. It is the foundation of every business.
Also, Economics defined it as a factor of production needed to create goods and services with the aim of satisfying human wants
How Important Is Capital?
For an entrepreneur, capital means a lot more than just money; it gives financial strength, ensures the continued existence of his business and plays a huge role on how successful the business venture would be.
It is the total of what must be invested so that you can make a profit.
You need capital to
- Register your business name
- Buy the Domain Name and Web Hosting
- Rent an apartment or shop
- Buy equipment and important materials
- Pay your employees etc
Questions you must ask yourself
For you to be able to raise capital for your startup, you must ask yourself these questions.
#1. What’s the minimum amount I need?
You need to know at least the minimum amount you need to start your business. Some businesses require huge amounts while others require low capital. For me, I had to raise at least $100 to kick off my blogging business.
#2. What Equipment or tools do you need?
You have to come up with a list of equipment or tools you need. For example
In Blogging: You need a laptop, steady electricity and an internet connection
Barbing business: You need clippers, mirrors, powders and steady electricity
Photography: You need a camera, Light, good background and a laptop for Photoshop editing etc.
Tailoring: You need a tailoring machine, clothing materials, Cutting materials, etc.
How to Raise Capital for Business
In this article, I will show you 7 ways you can raise capital to start up your business.
#1. Raise capital for business – Sell what you don’t need
Everybody can do this one. It’s a very simple way to raise capital to start up your business
So many aspiring entrepreneurs complain that they don’t have money to start a business. But they actually have properties they could sell to raise money.
For example, you may have a spoiled bicycle, radio or television. You can actually sell it and make some money.
Maybe your family or friends have a spoiled car. You can actually break it up into parts and sell it. Auto-mechanic shops will actually need them to repair vehicles.
So you have to look into your house and find properties you no longer need like clothes, shoes, TV etc and sell them to get money to start your business.
#2. Borrow Money from Friends
This involves receiving a certain sum of money or resources needed to run your business on credit, while you pay back on a later date, with or without interest.
You can share your business plan with your family and friends. They will always help you out by any means.
#3. Raise capital for business – Go for Bank Loan
To raise capital through this method, you need boldness and a strong mind because a lot of people are afraid of the word “Bank Loan”.
Several financial institutions offer loan services with interest to be paid at the expiration of an agreed date.
In other words, borrowing from a bank is a good option to help you kick off your business if you are sure that what you are venturing into can yield the sum within the period. Banks are no babies and will sell off your collateral if you fail to redeem.
I will only advise you to go for this one if you want to start a business which requires huge capital like
- Car Business
- Studio business etc.
Remember that as far as Nigeria is concerned, you need collateral for you to be eligible to get a loan from any bank.
P.S: You must be certain that you will recover the money in a short period of time.
Your industry can give you a loan too
In other words, another loan institution could be the corporate organisation overseeing the particular business you’re trying to engage in.
For example, the board of agricultural practitioners gives loans to people who wish to engage in any commercial agricultural work.
If what you need is fixed capital like land or machines, the firm lends you while you pay in instalments.
#4. Growing Capital – Spend Less, Save More
This method of getting capital to start up your business might delay your business plans but is one we duly recommend. A lot of effort is needed too; this is because money doesn’t grow like grass as some claim though even grasses don’t grow overnight.
This method will require you to reduce your expenses and save more.
You can start off by reducing the amount of money you spend on feeding, buying fuel for your car etc.
#5. Find a Sponsor
A sponsor is someone or an organisation that pays part or all of the cost required to execute your business ideas or skills while you do something else for them in return. (Some may not need you to do something in return).
In this case, your ideas must be something that must be beneficial to both sides.
Getting a sponsor is best recommended when you have gotten to a certain level in your business (or even if you’ve not started yet), but if you believe your ideas or skills are good enough to land you sponsors, then it’s a risk surely worth taking.
#6. Get a part-time job
You may also consider getting a part-time job in order to raise money.
These are part-time jobs you can get very easily (in just 2-4 weeks of application)
- Teaching: there are many schools out there where you can teach and get paid at the end of the month.
- Tailoring: If you really know how to sew shirts, trousers and boxers, you can go for it. In this job, you are paid according to the number of clothes you sew in a week or month.
- Sell Recharge cards: Get to Telecommunication company offices (MTN, Airtel, Glo and 9Mobile). Buy the recharge card in bricks and resell it at your home. This will definitely take your time to get the amount of money you need to start your business.
#7. Working As An Affiliate
If your dream business has a company or organisation offering affiliate jobs, then that could be your best option. The benefits are twofold. You get some job experience and capital as well.
The company pays you a commission for any sale you make. You save up your commission to start up your own business
For instance, if your dream business is to own a bookstore, you could work as an affiliate for an established bookstore, who pays you a commission for book sales.
WRAPPING IT UP
In conclusion, I believe raising capital for your startup should no longer be a barrier to executing that business idea. Get started.
But, do you want to know the fastest way to raise capital for your business? Even if you are a 16-year-old teenager or secondary school graduate. It works for everybody.
This method will only work for you if you have skills that can solve people’s problems.
The skills will include
- Proof-reading: You just need to correct grammatical and typographical errors in articles
- Writing: Can you write a compelling article? You should at least have learnt it in High school.
- Translation: Can you translate from one language to another? You can only do this if you can speak popular languages like English, French, Russian, Spanish etc.
- Transcription: Can you summarise a movie in written words?
- Voice over
- Research etc
You can sign up with these freelancing companies. They enable you to monetize your skills.
You can go ahead and sign up for these websites for free. Create a good profile and start applying for jobs for free. When you get enough money, you can use Payoneer to receive your earnings.
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Drop your comments below. Tell us how you raised money to start up your business. If you haven’t raised any money, what’s limiting you? Drop your comments and we will attend to you.
This Post Has 15 Comments
Thanks for this article. It’s really a masterpiece
Great Article. Capital is a must have to run a to-become successful business and you’ve shared all the needed.
Great Post, I’d definitely share with friends.
Do have a great day!
Prosper, thanks for stopping by
I am very much happy seeing a young chap like you in the blogging industry and the sort of sacrifice you have to make in order to start your blogging journey.
I had been in the blogging scene for quite sometime now and it involve me having to choose between enjoying some good meals with money or saving up to buy a laptop.
One needs to sacrifice sometimes!
Hello Emmanuel. Thanks for stopping by.
Sacrifice is very important.
you have good suggestions here how to raise capital for a business.
I think if it is something which one loves to do , he will find a way to
get the money together. Every start has difficulties, but it is also a learning
process, which can be beneficial for life.You are right it needs sacrifice.
Good post, keep going
Thanks for your contribution here.
Money makes Money….you need to really have CAPITAL to build you business….but more than money you need to have Guts and Patience…Guts to take strong decision and Patience to keep working hard towards your target…money will flow once you have all these qualities….great post..thanks for sharing…!!
Thanks for stopping by
Real Businesses are built with capital
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I don’t need to be told the amount of time invested in writing this piece… You really have done a good job. Keep it up!
Thanks for sharing this article, for new startups.
Really Good Suggestions for Build a Business.. in simple 7 steps.
Thanks for sharing..!
Thanks a lot for sharing this post as it has been very helpful.