There are lots of business clichés about needing a great idea or finding the right location, but nothing might be more important than securing funding for your business. When it comes to raising capital, there’s no one-size-fits-all solution. Every business venture is different, as are the concerns that motivate how an owner builds his or her business. If you’re OK with ceding some of your company’s equity in exchange for immediate cash, you could do so through crowdfunding or by seeking outside investors. If you’re OK with taking on debt, there’s always loans. Or, for those that want to retain control and forego debt, you can bootstrap your business, operating it with as few resources as possible early on in hopes of an exponential payoff in the future.
Luxelab founder David Abrams found that certain strategies worked at specific times in his business’ growth. As he explains below, an initial investor allowed him and his partner, Jason Lara, to build their first location. After they paid back their investor, the pair was free to expand to more salons throughout Los Angeles one by one while maintaining control over the brand and its expansion without outside debt. For their latest venture, the Chroma Color Bar, David and Jason turned to their own employees for financing. In doing so, the pair offered team members across their businesses a greater stake in the company’s future while allowing the company to grow sustainably and securely.