5 ways to fund your startup as a solopreneur

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Although there are various ways to fund your new business, many options are either expensive, require collateral (such as investors or venture capital funding). If you prefer to self-fund your business ventures, here are five smart ways to fund your startup as a solopreneur.

Also see: 4 absolutely awesome reasons why being a solopreneur is awesome

Open a savings account

A great way to start your business is by opening a savings account. We’ve all heard the famous saying that “cash is king”. If you’ve already set aside money to get your business off the ground, use your savings account as a central place for all the money that goes toward starting your business.

Depending on the nature of your business, you may need to set aside funds for legal fees (such as trademark filings), building your online presence, and any cost of goods. You should always have a separate savings account for any personal expenses that may arise. Never use up all of your savings just to start a business.

Open a credit card

A second way to finance your business is through credit cards. If you must use a credit card to fund your business, apply for a credit card that offers 12-18 months of 0% APR, a high credit limit ($25,000 or more), and at least a 2% cash back bonus. This way you can invest in your startup quickly and have at least a year to build your sales and profits. But you should make sure you can pay off your balance in full before the interest rate kicks in (after 12-18 months).

Without payment discipline, credit cards can quickly lead to high debt and high interest rates. Keep this in mind as you explore this option to finance your business.

Related: 4 Differences Between Solopreneurs and an Entrepreneur Who Works Alone

Open a personal loan

A third way to fund your startup as a solopreneur is to open a personal loan with a bank. Since most traditional banks require collateral (personal property) to secure a loan and generally only offer short-term loans that need to be repaid within a few years, it is wiser to apply for a personal loan from an online bank that offers competitive interest rates offers. such as SoFi.

For example, if you have good credit (750+ credit score), you could potentially be granted a $25,000 unsecured personal loan with a 5-year term, an annual interest rate of 12%, and a monthly payment of around $600 . Not only do you get more time to pay off the loan and build positive cash flow in your business, but you also help improve your credit score. Another added benefit of this option is that you can apply for a loan refinance after three months of payment, potentially reducing your monthly payment and interest rate.

Use Buy Now, Pay Later programs

Another way to fund your new business is to outsource the payment of your sales. If you run an online business, tools are like Klara or additional payment Pay your business for your customers’ purchases while allowing your customers to pay in easy installments at a later date. These types of “buy now, pay later” schemes are especially helpful for your customers if your website offers higher-priced products (e.g. you want to pay over time). These programs allow your business to have the money right away without having to Having to provide credit to customers (which is a risk for any business).

Also see: 10 ways to finance your small business

Launch a Kickstarter

And finally, the fifth way to inject money into your new business is to launch a Kickstarter campaign. This crowdfunding website allows business owners to raise funds from potential clients and people they know. It’s also a great way to increase online visibility, build brand awareness and test the viability of a business idea with real feedback.

The best way to get people to invest in your business through Kickstarter is to use your social media channels to spread the word about your campaign. It also helps build a sense of community and engagement around your brand, leading to customer loyalty.

Another thing to keep in mind when evaluating your budget for your startup is that you can save thousands of dollars every month by not hiring expensive agencies. Many PR firms charge at least $5,000 per month just to send out a press release, and several Facebook ad agencies charge at least $10,000 per month to run ads for your business. Not to mention that they cannot guarantee advertising or sales conversions.

As you can see, there are many ways to finance your new startup as a solopreneur without having to worry about investors or partners. Depending on your goals and starting point, each of these funding options has its pros and cons. Research and evaluate funding avenues as you plan your business launch.

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