How to Get Funding for Your Business with No Money? 5 Ways to Fund Your Food Startup
We all know that running a small business is hard. Especially, a food business or restaurant. But many people don’t make it past starting because they don’t have the money needed to sustain the business. If you are constantly asking, “how can I get funding for my business?” this article provides tips on how to fund your business or start up.
How to fund your business
1. Bootstrap Your Business
Bootstrapping is when you personally fund your business or the business makes enough money to keep itself going.
This is one of the best ways to fund your business, especially over a long period of time.
Many entrepreneurs continue working a full time job or a part time job for several years before working in their business full time.
It can be difficult to juggle a business and a job, but having income from a job can help reduce the pressure of needing to build a successful business as fast as possible.
2. Crowdfund Your Startup
Lots of entrepreneurs use websites like Kickstarter, WeFunder, FundBlackFounders and more to raise money from the public.
Traditional crowdfunding is basically having customers pay upfront for your product or service.
Equity crowdfunding is different. People invest money into your business, hoping for a return on their money.
3. Apply for Grants
Another great option for you and your business is to apply for (and hopefully, win) business grants.
This is money that does not have to be paid back. It’s not a loan.
There are thousands of grants available to all types of businesses worldwide.
Learn more about grant opportunities, especially for Black entrepreneurs, with Danielle Desir Corbett’s Grants for Creators newsletter.
4. Get a Business Loan
Getting a business loan, usually from a bank, is a less popular option for funding your business.
Historically, Black entrepreneurs are less likely to get business loans.
Also, this is a time-consuming process filled with paperwork and presentations because you need to be able to prove to the bank that you and your business are a great investment for them.
5. Find and Convince Venture Capitalists to Invest in Your Startup
Can you tell that I saved the worst options for last?
Venture capitalists (VCs for short) invest money (and sometimes other resources like mentorship and networking) into companies that are considered high-growth.
In exchange for their investment, VCs get an ownership stake in your company.
I wrote about the difficulties and potential pitfalls of getting venture capital investors for your business in 10 Things to Know about Venture Capital for Restaurants & Food Businesses.
Which type of funding is right for your business?
The answer is different for every entrepreneur and their business.
Here are some factors to consider when deciding how to fund your business:
- How much money do you need? Why? What are you going to do with the money?
- When do you need the money? If you don’t get the money, what will happen to your business?
- Is your business currently profitable?
- What are your needs besides capital? Are you looking for mentorship or business connections?
- How much equity, if any, are you willing to give away?
- What stage is your business in? Seed (beginning stages)? Or are you further along in your business journey?
