I’ve been going on and on about crowdfunding in my previous posts, so I thought I should just advice you that even though crowd funding is a super way to raise much needed capital needed for your start up, it will require some thought like knowing which type of crowdfunding will be suited to your project. Certainly if your company’s resources are stretched to the limit, crowdsourcing and play an important role with your content marketing for instance. It is important to research some projects similar to yours and look at the platforms they did well on. For instance we all know that Kickstarter is a popular crowdfunding sites, but you need to discover that there are drawbacks to using it such as their being no marketing help.
Crowdfunding opens up a new world of opportunity to startups, opening up chances for capital to flow into a startups. This has benefits all round as new companies mean new job opportunities. If you’re a start up in New Zealand, there are open-format websites which educate the public on the topic of crowdsourcing, offering plenty of crowdsourcing resources and guides. I’ll say it again – creative crowdsourcing is a very useful tool and because content marketing is about people increasingly sharing online, it is important, if not critical to maintain fresh content to maintain sharing of ideas
You have got a great business idea but the bank does not believe you will do good. Borrowing from friends and family used to be an option, but not anymore. Getting funds from a large number of investors does not make the money a cheap source. There are basic questions to be answered. If you answer them correctly your company will rock. Following are the questions and tips to answers:
- How much money should be borrowed?
- Tip: Work backwards and figure out all components required to complete a project or dispatch an order. Very important thing to remember is add profit.
- From whom it should be borrowed?
- Tip: Remember owner’s money is most expensive source of money. However I suggest you to discuss with experts when it comes to interest rates and loan terms.
- Where it should be used?
- Tip: When money goes out, it either becomes an expense or creates an asset.
Using money from sales:
- Assuming income through sales has the ability to pay first three stakeholders in order of payment i.e.
- Hoping the business still has money in form of net profit following questions need to be asked:
- How much should be reinvested into the business?
- Tip: If sufficient money is not reinvested then business has to again borrow.
- What borrowings need to be repaid?
- Tip: pay off expensive borrowings like credit cards and overdraft.
- How much should be distributed to shareholders?
- Tip: Investors will invest only if they can believe you can make more money with their money than they could have made with their own money.