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What way did you fund your business?

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This topic contains 15 replies, has 6 voices, and was last updated by  Matthew 5 days, 2 hours ago.

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  • #4516

    Matthew
    Keymaster
    Points: 355

    This is a question that has always intrigued me. Finding out the many different ways that businesses have funded their adventure and growth. I have had the pleasure of starting three businesses all with different types of funding.

    My first business started off of no funding period. I didn’t have a dime or even a website to speak of. The business actually began off of a forum like this one. I was just looking for information to read and to find out how a few extra tips about insurance products. After a while, I was able to help some of the members that were also on that site and build a business that helped those members, provided commissions for both the members and myself (a small 5% percentage for myself) to build the first business. It was pure luckiness is what it was.

    The second business and also a failed one. I had taken a loan of about $20,000 USD to start a online retail store that focused on military veteran type products. However, it also had an additional facet to it. It was made to donate some of the profits to military charities and to be a free service for veterans to find resources and get help. I thought it was a GREAT IDEA! However, I was alone in this endeavor of mine. I would have loved to see it work myself as I am a veteran as well. After six months, I did sell products and did well on the retail side. However, my dream of developing an established service to veterans struggled and I didn’t have the resources for myself to build upon this second business, help veterans, and run the first business. I was unable to get the business truly going. In November of 2015 I closed the business.

    The third business (after I paid back that $20,000 Loan), I started in February of 2016 it was strictly online based and I said I wasn’t going to dump money into something that hadn’t generated its own revenue stream. So again, I started without a website, with no capital, and the only resource was myself. I began a web designing business which stemmed back to 2007 in my early days of coding and design class. I did some small jobs here and there to get the ball rolling, then got help with staff members willing to work as hard as me. The business took off and I have now ran both businesses successfully for two years.

    Let me hear your story, how did you start your business? Does anyone have a case where they took captial and made way more in the first few years?

  • #4528

    Param
    Participant
    Points: 10

    Thanks for sharing your great business Funding insights. I really liked the way you struggled through.
    Here’s my journey.
    – I started with providing IT services to customers online through upwork way back in 2012 when alot of people were deprived of this marketplace due to lack of knowledge.
    – I dint actually have to fund it because I could easily find my co-founder and we both were the in-house team of developer and a business finder.
    – In 2014, we’d grown enough to think of a new venture or expanding the same venture to new heights. But IT services being over crowded we thought of starting up a coworking space as the concept was alien to our region then.
    – While setting up the coworking space which would support startups, freelancers, small businesses etc. in setting up their dream ventures of be their own bosses, we found two other co-founders which could take the concept forward and establish a coworking space with us.
    – We invested a minimal amount of Rs. 1Lac each here in India and setup the space. Customsers started to flow in that one floor of 2000Sq Ft. and soon it got sold out within a span of 8 months.
    – In January 2016, we took another floor in the same building on lease and launched it. For setting this up again, we put in some more amount of money which was around Rs.1Lac each. Now two floors were not possible to be setup in 4 lac each but until then our business could bootstrap itself for further development of infrastructure. Until late 2016 we did not properly get payed out of that business but yes, we bootstrapped it and never went for an external investment.
    – Now, in June 2017, we’re again in a position to expand our office coworking to more space for which we may require external help because the infrastructure stakeholders have increased. We may require a ccapital of 20Lacs at once to set the basics up.

    What we’ve learned from our journey: Keep putting money in your venture, the right and minimal way and it will definitely pay you back someday. Bootstrap. Thats the beest way to go for it. When you get external funding for your business from inception, you do not learn a way to survive tough tides.

  • #4548

    Susan
    Participant
    Points: 220

    Yes, being an entrepreneur can oftentimes be an “expensive” learning experience. While I’ve been involved in the financial services and insurance business for most of my career, there was a point in the mid-2000s where I considered changing careers to become a real estate investor. Unfortunately, timing is often just as much of a factor in your business success as money, experience, and well, just about anything else. In this case, I went on a property buying spree at the top of the market – just a few years before the big market crash of 2008. This meant that I not only purchased several properties that were essntially way over valued (and overpriced), but when I went to sell them in 2008-2009, I didn’t get nearly what I had planned on. In fact, in one particular case, I spent in excess of $5,000 fixing up a house (after my tenant destroyed almost every inch of it), and then still had to bring $17,000 with me to closing as the seller! The lesson learned here, among others, was to stick with what you know…especially if the endeavor requires a large out-of-pocket financial commitment from you.

  • #4555

    Matthew
    Keymaster
    Points: 355

    I can’t agree more here on this one. I own only one property at this time and I have thought about maybe getting just a couple more. However, I want the mortgage to the first one not to be there before I do that. I rent the other property out now and I rent the current place I stay until I can get into a really nice home that I can afford and want to live in forever!

  • #5000

    ursellb
    Participant
    Points: 0

    Well I funded my business by getting a
    Credit card and that didn’t work out for me because I haven’t made any money
    yet.

    • #5036

      Param
      Participant
      Points: 10

      Persistence. Keep it on and it will pay you off someday. But make sure you believe in your idea that you’re working on.

  • #5038

    Destiny Valid
    Participant
    Points: 0

    When I started my business,I initially used friends and family debt capital until I was large enough to attract more substantial from other investors.

    The truth is,most small businesses piece together their funding from several different sources phased out over time.

    • #5078

      Matthew
      Keymaster
      Points: 355

      How has that worked out so far? Have you managed to pay some people back, do you have anyone asking for the promised money as of yet?

      • #5120

        Destiny Valid
        Participant
        Points: 0

        Everything has worked very well.I have managed to pay up all the debts.The business is operating very well.

        • #5123

          Matthew
          Keymaster
          Points: 355

          That is very enlightening to hear. Especially after my own business catastrophe where I had to pay a bunch of credit cards back to take care of a failed business. It’s a good thing I have two that are successful now to make up for the one failure!

  • #5044

    Susan
    Participant
    Points: 220

    In many cases, piecing together funding from numerous sources is the way that companies have gotten off the ground. Oftentimes, an entrepreneur may not have access to loans or other avenues of credit. Therefore, turning to family and / or friends for funding may be necessary. In other cases, a new business owner may need to continue working either full- or part-time so that income will continue until the business gets up and running. While it may provide you with more time to work on your business, going full force at the beginning could have disasterous consequences if you have not incoming cash flow, and the business does not take off the way you hoped it would.

    • #5079

      Matthew
      Keymaster
      Points: 355

      An important factor is that even if you fail whether through funding, mis-management, or any other way failure can happen to a business venture. It is always best to take it as a learning change. Find out what went wrong, learn from it, move on and get back on the horse so to say.

      I had a pretty big failure in my second business, I owed a good bit of money. However, over time, I paid that money back and I don’t owe anyone. Another funding type that I want to talk about is re-investing in your business. This could be many different types of investments such as putting money into your website, conversion tools, hiring employees to help with the work load or freelancers. I believe after the initial funding to get your business going is a plan to re-invest into the business after its been going for a while. A workforce that you treat with respect because it is growing your business by taking some of the work off of you.

  • #5145

    Susan
    Participant
    Points: 220

    Sometimes it may be necessary to get a “job” if your business – and its funding – doesn’t work out. But as others have stated, it is important to take the learning experience as to why the business didn’t take off, and use that knowledge for moving forward when you decide to try again. Just like Thomas Edison said when the light bulb didn’t work over and over again, “I have not failed. I’ve just found 10,000 ways that it won’t work.”

    • #5152

      Matthew
      Keymaster
      Points: 355

      Great Quote! I most certainly found a way not to run a retail business when I first started that adventure. I am not sure I would open one again but I definitely learned some valuable ways to adjust my current businesses and take it much slower than I did that first time.

  • #5318

    Purity Mani
    Participant
    Points: 24

    They are so many ways to fund a business,one can sell something you own like a car if you have like 2 or more cars you can sell one which don’t mostly use of which you can replace later but sometimes requires sacrifice you can choose to stay without a car for a while and once the business has picked you can replace it .Also you can have a credit from a bank or from credit offering institutions and pay by installments,or borrow from friends and family.

    • #5324

      Matthew
      Keymaster
      Points: 355

      After seeing your post, it also made me think about another way to get investments into your business is to offer partnership percentages such as 1% or 2% on all sales for this product. How did you fund your business?

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