3 Great Ways to Fund Your Business Without Splitting Profits or Equity
Free Book Preview Entrepreneur Kids: All About Money
When most people think about funding, they usually think of an investor, a business partner with deep pockets, a crowdfunding campaign or a loan. Is it really worth it to split profits -- and control of your business -- with someone who doesn't know or care about your industry like you do? No way.
You can fund your own business without high-rolling investors. In fact, you're probably already sitting on the money you're looking for right now -- you just need to put your skills to work and take smart risks. That's the question you should be asking: "How can I find the capital myself to start my dream business?"
I'm going to share with you three stories of people who have self-funded using my advice. All three faced the same problem: They needed capital to start their business.
Instead of asking other people for resources, though, they got resourceful. They leveraged the skills and assets they had already to generate capital, and in the process they strengthened their own entrepreneurial muscles, which are ultimately your true source of wealth. You can do the same with the right mindset, and your business will have a much brighter future because of it.
1. Leverage your existing client base.
One of my clients needed a new space that could house his rapidly growing client base. Because his fitness business was booming, he received countless partnership and investment offers to fund his expansion, but he turned them all down. Why?
He knew he could fund the expansion himself, so he decided to get creative and offer his current clients exclusive pre-launch deals. Many of these offers were paid-in-full deals, so he received a ton of money up front to fund his expansion. It worked: He just got the keys to his new place and is in the process of building it out right now.
You should also be leveraging your skills and existing client or customer base to make more money. He knew that he could follow up with leads and close them, both one-on-one and in groups, and he used that skill to secure capital on his own.
But, not everyone has a loyal clientbase to turn to -- or clients at all. In that case, it's time to hustle on the side.
2. Hustle for social proof.
If you don't have any clients, then you need to bust your butt on the side to get some first. Once you do manage to close a few clients, you can use them as social proof to attract even more clients, enough to make the money you need to start working on your business full-time.
One of my clients did exactly that. He wanted to start his own personal training business, yet he didn't have enough clients to go at it full-time. In fact, he only had one client starting off.
My client made up his mind to do whatever it took to get clients on board. He trained friends and family for free just to collect social proof, which proved to others that his training program worked. While he wasn't training his clients, he was calling five acquaintances a day and inviting them to try out his boot camp.
Thanks to his hustle, his business is on the rise. Those early clients gave him the money he needed to start working full-time on his business.
3. Build a following as an affiliate.
Ever heard of affiliate marketing? It's when you promote someone else's product/service for a commission fee, and it's one of the savviest ways to earn capital and network with brands that share the same target audience as you.
Affiliate marketing is very low-cost, which means you take home more money in commission if the product you promote sells well. If you pick the right product to promote, and if you can negotiate a favorable commission fee, you'll make enough to get your business off the ground, possibly with a little left over to pour back into your marketing efforts.
Two of my clients used affiliate marketing to start their business without any cash or clients. How? They created a Facebook page and ran ads for a growing brand, earning enough to fund the launch of their business.
They didn't just make money from product sales either. They were able to funnel prospects who clicked on those ads to their email list. From there, the rest is easy; they just had to send those prospects valuable content and earn their trust so they could pitch them on their flagship product/service.
Again, that's because they chose to be affiliates for a company that marketed to the audience they were after, already had a relationship with them, and knew how to attract them.
Here's the bottom line: You don't need someone else's money to fund your dream business. It might take time, but you can absolutely raise enough capital by putting your skills and resources to good use. Go out there and generate cash yourself -- you'll develop some hard-earned business experience that will pay off for you in the long run.