They say a business idea means nothing if you cannot execute it. This is very true. Over the years, investors have moved from being interested in great ideas to being very interested in tangible products that solve a need in the market and have the potential to scale up.
To turn an idea into a business, there are things that an entrepreneur needs to work on that involves money. From registering a company, Research and Development to building a prototype. Most entrepreneurs will have used up all their savings plus the funds they got from the 3 Fs. (Friends, Family and Fools)
At this point, most start-ups are not investor ready. So how do you move from a prototype to launch?
Here are 5 ways that you can fund your business this year:
Competitions vary from hackathons to pitching competitions to business plan competitions. As an entrepreneur, always practice your 1 minute pitch, 3 minute pitch and the 15 minute pitch with a presentation. Have a simple business plan or business canvas that you can explain to friends easily. The next thing is to watch out for these competitions and APPLY! Subscribe to local hubs newsletters so information on these competitions don’t pass you by. Follow them on social media and be in the loop all the time.
Grants are one of the best ways to get a start-up funded as there are usually no strings attached. You will not repay the grant, however, there will be restrictions on how to use the funds. There are thousands of grants available and the challenge for many entrepreneurs is how to get them.
First, do your research and see what foundations fund as some of them are themed under green energy, education, technology innovations etc. The application process can be tedious, as hey specifically look for certain projects to fund. How you put out your proposal also matters. Go through ther application guidelines before you apply for any grant.
Most corporate companies have a Corporate Social Responsibility (CSR) department that support projects which help in solving social issues in the communities. Some companies may have a Sustainability or an Impact Investment department.
All the funds they give to projects are not repayable and they do not expect any stake in you organization. However, most of these are NGOs or Social enterprises that solve an social and environmental problem in their community.
If your business revolves around that, make a list of all corporate companies in your area and research on the kind of projects they fund. Write an email to head of CSR or Sustainability and request for a meeting to present your idea or send in a proposal.
In this digital age, may start-ups have been able to raise funds through friends and strangers online. The internet has funded some of the most successful businesses of our times. Crowdfunding platforms like Mchanga, Kickstarter, Indiegogo allow start-ups to pool small investments from people online. Most sites allow businesses to raise money in exchange for products or rewards. Others have an equity based model in which businesses give up a bit of their share. Crowdfunding works best with the power of storytelling and social networks. If you have 3,000 friends on Facebook and thousands of followers on twitter, you can tell your project story and share on these platforms. Make an appeal for friends to share and contribute. Talk to influencers to share the story and who knows. Your business may be funded by strangers who were moved by your story.
This may seem like out of reach for many but the government has many programs dedicated to empowering young entrepreneurs. The biggest challenge they have is communicating some of these opportunities. We have financial loans by the likes of Uwezo fund,Kenya Industrial Estate(KIE) where they disburse loans with low interests from 8 -15%.The Government also has incubation services for start-ups. These are offered at institutions like Kenya Industrial Estate (KIE) and Kenya Industrial Research and Development Institute (KIRDI) mainly for young manufacturers. Apart from that, the Government offers training and capacity building on running businesses, exports, agriculture and many other areas that will benefit a start-up.Check newspapers and follow the relevant ministries on social media platforms to look out for such information.
What are the other ways an entrepreneur can raise funds before she becomes investor ready?