What if I need funding to start my Online Business?
If you find yourself in a position where you can’t get a start in eCommerce without funding, there are some options that you can consider.
An important note: do not gamble with money that you can not afford to lose.
Below we will share 3 options to fund your eCommerce Business:
Typically called self investment, this is the option we recommend to start with. As you probably have limited funds to start your Online Business it can be tough, however many have made it in eCommerce by using this method.
How to Bootstrap:
- Use your savings where no other options exist
- Use Free and Open Source resources
- Use Revenue from sales to grow
What if I do not have savings?
- Is there something you don’t need that you could sell to raise the money for your eCommerce venture?
It might be tempting to use this option from the start, however we do not recommend that you do. Borrowing should only be used when you have exhausted all bootstrapping options and when you have confirmed that your eCommerce Business Idea is viable. Preferably when you have already made your first sales, generated revenue and have a clear plan to grow your Online Business further.
Where to borrow:
- Friends and Family
- Banks or Financial Institutions
Our suggestion here is to start with your friends and family and try to avoid personal loans, credit cards and any form of high interest rates.
There are many external investors out there, most will require you to have a viable, revenue generating business before they will even talk to you. When they do agree to offer you the funding you were looking for, most likely it will come at a cost of a stake in your business. Be very cautious here, you don’t want to give away a large stake in your eCommerce Business and lose out on profits while still having to do all the work.
- Be clear on what you want from the investor and what you want in return.
- Think strategically to what additionally from finance your investor can offer.
Finding External Investors:
- Ask people you know
- Attend Business Seminars
- Approach Funding Consultants