2016-01-08 00:00:00Funding & FinancingEnglishhttps://quickbooks.intuit.com/in/resources/in_qrc/uploads/2017/05/Funding-Financing-4-Overlooked-Sources-of-Funding.pnghttps://quickbooks.intuit.com/in/resources/funding-financing/four-overlooked-funding-sources/Four Overlooked Sources of Funding

Four Overlooked Sources of Funding

2 min read

Money, as they say, makes the world go round. It is also said that there is plenty of money to go around. The challenge for small businesses in a money-centric world is, it would seem, to gain access to all this monetary abundance. There are a number of commonly funding methods that used to raise funds such as, from opening a line of credit at a bank, to taking out loans, to partnering with an angel investor. While these avenues are popular, they’re also in high demand and not always easy to access, seeing as how they often come with certain preconditions (such as your personal credit history, in the case of bank loans). Luckily, alternative sources of funding also exist. While not all of them involve the exchange of money or the involvement of financial institutions, some of them do. The power of many Crowd funding is a fairly recent phenomenon, but an extremely popular one. Thanks to the Internet and its ability to spawn and mobilise virtual communities, strangers with a shared passion for a novel product or service idea are more than willing to put their money where their enthusiasm is. Platforms like Kickstarter and Indiegogo are popular in the U.S., while India has its own home-grown versions like Wishberry and Catapoolt. Share and share alike Bartering is one of the oldest modes of transacting business. Instead of money, individuals trade products or services: person A might give person B a kilo of rice, in return for 500 ml of oil. Similarly, in the world of small business, you could trade your services as a building manager in return for free office space in which you can set up your business operations. Or you might consider building someone a website in return for office furniture and supplies. Of course the challenge here is to figure out how to quantify the value of each product or service in terms of what it is being exchanged for, which is why money’s siren call is hard to ignore in the long run! Get a customer to ‘adopt’ you Well, not you exactly, but your business. What this means is that you would commit to producing and supplying your goods and/or services to your customer before introducing them to the wider market, in return for funding. The one downside is that you would function, for a short period of time, like a subsidiary of that company. Keep your eye on the prize, and take a moment to appreciate the fact that you have the freedom to focus on getting your product right, given that you have a guaranteed customer. Grants Applying for private or government funding, in the form of grants, is another underexplored way to gain access to the finances you so desperately need. If you happen to be selling products or services that are in sync with key trends, you could avail yourself of public and/or private sector research and development funds. Say you plan to create and market non-toxic, organic soaps and cleaning supplies, you could tap into global interest in climate change and position your product as a green alternative to current market offerings. While these methods might come across as unconventional, out-of-the-box thinking can help you lay claim to funding sources that other companies often overlook or underestimate.

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

Related Articles

5 Fun Team Building Activities for Small Businesses

Could your company’s teamwork use a boost? Building a team takes time…

Read more

Basic Financial Statements: All You Need to Know?

According to a published report, contribution of  MSME sector towards the growth…

Read more

4 Government Loan Schemes for Small Businesses in India

Micro, small and medium enterprises (MSMEs) are the backbone of the socio…

Read more