Financing Solutions for Startups: Part 1 – The Personal Route
Financing Solutions for Startups: Part 2 – Get a Loan
Financing Solutions for Startups: Part 3 – Federal Financing for Technology Businesses
Financing Solutions for Startups: Part 4 – Saskatchewan Agri-Business Tech Research & Development
Financing Solutions for Startups: Part 5 – For Indigenous Businesses
Financing Solutions for Startups: Part 6 – Grants
Financing Solutions for Startups: Part 7 – Angel Investors
This article examines the first option in any financial solution – using your own money.
Okay, you have a great idea or product and have finished your business plan. Now, how are you going to pay for it? Finding a financing solution for a start-up can be one of the most intimidating obstacles when thinking about starting a business and can possibly stop you in your tracks. Don’t worry, we have your back. Over the next several weeks we are going to take a walk through the various solutions ahead of you, from self-financing to grants and Angels. You will be happy to know that in Saskatchewan there are many options to help you get your dream off the ground.
So now that you have formulated a master business plan (for more information, follow our series on Business Planning 101) you will have the tools to not only begin researching but also be able to approach and apply for financing from numerous sources. The following guide has been built and will be continuously updated to offer as many solutions as possible, resources and companies to help you streamline your journey to being a new business owner. Don’t worry, it is not as intimidating as it feels.
The Personal Route
It may not seem possible for you, but 78% of business start-up owners didn’t seek outside financing outside of personal savings or job income in the first year of their business. You could sell your house, car or other things that you own but in Saskatchewan there are many other options available to you. Remember that you don’t want to break your bank or spirit before you even get started or your business will die in the nest before it ever learns to fly.
Other personal options are to cash in your RRSP’s, ask friends and relatives (which can make for some awkward gatherings in the future), or use credit cards. But, if history has taught us one thing, all these solutions come with some form of personal risk to your future.
One additional outside the box option consists of the various versions of crowdfunding resources out there. You can raise funds on Kickstarter, Indiegogo, and GoFundMe; or enter a funding contest or rely on pre-sales, but all these options come with the inherent risk of pre-revenue debt, inability to manufacture for market, and failure for your company before you can even get off the ground.
So where do you begin?
Join us for the second part of our series as we look at loan opportunities for your business start-up.