The biggest challenge many entrepreneurs face when starting or growing a business is raising capital. I have been there many times so I know what exactly I am talking about.
There is nothing as depressing in this life like having an innovative idea that could rock the business space but lack even a dine to taste the market …
According to research by CB Insight, nearly 40% of startups fail due to this simple fact – lack of funding. Therefore, fundraising (the ability to raise money for a business or project) is an important skill for every entrepreneurs who must succeed.
Without these skills, the best, most innovative ideas will quickly die out.
In this article, we will discuss some interesting strategies on how to raise capital for your company.
How Can I Raise Money for My Business in Nigeria?
1. Start with What You Have – Just Start Anyhow
Many investors believe that if your business idea is as good as you say it is, you should be the first to invest, and you have to make sacrifices.
Even if you do not have cash, you could have something you could sell to begin your business. Don’t be like some Nigeria youths who have several gadgets worth N200,000 yet they claim to be looking for money to start their business.
Banks and investors often consider investing in your business based on trust and strong confidence in the potential of the business. And on of the way to show that trust is by having something you can begin with.
As the saying goes, if you can’t invest your money in your business, why would anyone?
2. Convert Your Social Network into Financial Capital
Once you have used all personal your income, now is the time to convert a portion of your social relationship into financial capital for your business. Like they say a man who has people has money also. Who do you personally. Now is the time to pull on such relationship.
Social capital is the price of good relationships in your life.
They come from families, relatives, close friends, current and former colleagues, former classmates, neighbors and more.
Because of these conversations, they will listen to your ideas more than strangers. They will often be the first group of true followers and followers.
But raising money from friends and family can be a challenge. You don’t want to lose the trust and friendship of those close to you.
That’s why it’s so important to have a strategy and execute it well.
3. Find A Financial Partner
Some people have the money but not the time, intelligence, knowledge or skills needed to start or build a successful business.
These people may have other full-time responsibilities (like work) or may not have the risk appetite or entrepreneurial ability to actively run a business.
A win-win partnership is possible because of this.
However, business should be divided wisely.
If the partnership is successful, the synergies between business partnerships increase. However, if not done properly, a bad business partnership can lead to conflicts in which a healthy business can collapse or collapse.
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4. Raising Money From Angel Investors or What We Call Vision Helpers
In the early days of your business, it can be difficult to raise funds from formal sources of capital such as banks and investment firms.
Most banks and investors are reluctant to invest in “early stage” businesses because they are exposed to high risks.
But you can look for angel investors. These are individuals or groups who invest in a new company at an early stage in its journey.
Angel investors are typically successful entrepreneurs, well-paid senior employees or high-income individuals who are attracted by the opportunity to earn high returns with high-risk investments.
Facebook is a great example of the impact angel investors have on companies.
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5. Win Business Competition
Winning business competition is a way to raise capital for your company. Entry to most of these competitions is free. You don’t have to pay anything.
All you need is a new or well-known business idea and the ability to present your business idea on the business platform to earn the trust of investors.
Unfortunately, many entrepreneurs don’t know how to discover these options or how to run their business in a way that maximizes their fundraising potential.
6. Accept Payment from Your Clients in Advance
If you have customers who need your product or service immediately or desperately, they would often be willing to pay for your product upfront.
This “down payment” usually pays to develop a product or service, deliver it to the customer, and make a nice profit.
In fact, some of the world’s most successful entrepreneurs and companies regularly use this skill and fundraising strategy.
Watch this video to get more ideas on how you can raise money for your business
Conclusion
Raising capital is really a critical challenge for Nigerian entrepreneurs. But you just have to Start with personal resources. Just start anyhow guy.
You can also leverage your social networks, seeking financial partners and securing advance payments from clients are also viable strategies to fund your business dreams. Just Begin, you will succeed.
