Since we are aiming to help mompreneurs kick-start their business ventures, it’s time to talk about how to fund your project.
An important component that will help you secure funding for your venture as a product entrepreneur is to prepare a financial plan. The plan must address the financial goals for at least the first year.
The first year is very crucial for your business and the idea is to prepare a budget that addresses the operational expenses without going into a deficit.
Once you have a realistic financial projection, you can begin to think about funding. Here are ten sources to fund your dream venture:
1. Bootstrapping
In the beginning, many mom entrepreneurs fund their startups through bootstrapping. Bootstrapping involves using personal savings, borrowing from friends and family, or promising stock for sweat equity. Getting investors is not an easy task when starting out, so bootstrapping is often a necessity.
2. Financing through Equity
Equity can be an excellent way to fund a mompreneur product idea. Equity includes funding you receive in exchange for stock in your company. Equity can be attractive because entrepreneurs do not need to pay back the money immediately in installments like they do with debt payments. Also, the entrepreneur can leverage the experience and a network that the investor brings. However, you must be willing to give up some ownership in your company to the investor.
3. Bank Loans
The banking system is one of the traditional sources of financing a business for successful mompreneurs. Bank financing is provided through a loan or credit line. Keep in mind that bank loans involve paying interest on the amount borrowed.
4. Microloans
Another option is to apply for a Microloan, which is a smaller sized loan of up to $50,000. Sometimes, a lack of credit history or collateral makes it difficult to get a traditional bank loan. Often, microloans are too small for commercial banks to give. Mompreneurs can seek microloans for smaller loan sizes offered by non-profit organizations, Credit Unions, the government and community groups.
5. Government Funds
Government funds help establish small businesses for women entrepreneurs. You can do some research about various opportunities and funding options for small businesses, such as federal websites.
6. Funding through a Non-Profit
This is a great source for mompreneurs. You can get the funds needed for your business from a non-profit that supports businesswomen with brilliant ideas but limited funds.
7. Supplier Credit
You can get funding for your product entrepreneur idea through supplier credit or supplier financing. The supplier credit form of financing is common mainly for stores and restaurants and is typically characterized by short-term customer credit.
8. Crowd Funding
Another option for successful mom entrepreneurs is to make an account on any popular crowdfunding website to get the funds needed to help your business idea to take off.
9. Grants for Small Businesses
Small businesses get a lot of help and support from various agencies and banks. It’s time to do your homework and search the internet for small business grants near you to start your own business.
10. Factoring
Factoring is a method where the company has the option to sell all or some of its accounts receivables at a discount to get cash up front. This method of funding is an option for mompreneurs who want to arrange funds to cover their operational costs.
Launch your dream business and live the life you’ve always wanted by becoming a successful mompreneur!
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