The most important role for any small business owner is managing cash flow. Let’s face it, without bucks there would be no buck rogers, so keeping your eye on the cash coming through your business is a necessary function if you want to survive. However, there are times when you need some extra cash. Maybe it is because you are growing too fast, or maybe you need to buy new equipment. Either way, a little extra cash every now and then can come in handy. Here are five hacks to help get you the money you need for your small business.
- Small Business Grants
Everyone, except for the banks, know small businesses are the backbone of the economy. While bank loans have become harder to come, the government and even some foundations have stepped in to provide grants.
While accessing this cash can be tedious at times, it can be well worth it as your business might fit a need that a particular grant covers. Keep in mind, that not all grants are finance aid. Some will provide free interns or mentors and this support could be just as valuable as cold hard cash.
- Friends and Family
Who knows you better than your friends and family? As such, they should be the first ones you reach out to when seeking some extra cash for your business. While this approach is not without its risks, the odds are that your closest relations will want to help you succeed.
Besides borrowing money from people who want to help you succeed another plus of friends and family is that they are likely to charge you little or no interest and this will help in terms of your ability to repay the loan.
Sites like Kickstarter and Indiegogo serve a great role for small business owners as they help to connected these companies with millions of investors who are willing to take a chance. While crowdfunding has helped to democratize small business finance, the path is not without its pitfalls.
For example, it takes a lot of time and energy to run a successful crowdfunding campaign. This means that you will need to plan every step in the campaign to make sure that it runs like a well-oiled machine.
Depending on the crowdfunding site you choose, you will need to offer some sort of token to your backers. This could be a gift, or a version of your product, or even equity in your business.
So, if you think that crowdfunding is for you then do some research to figure out how you can run a great campaign.
- Personal Assets
Granted this is a high-risk approach, but sometimes it is also the safest way to get the money you need for your business. It could be by selling assets or even pledging them against loans. Take for example a reverse mortgage. The plus of these loans is that you don’t have any monthly payments.
So, if you need money for a short to intermediate term need, then this approach might fit for you. If you do decide that this is the approach for you, then you will want to make sure you check out more information on reverse mortgages – like the information posted here.
- Private Equity
Private investment has grown from a niche, but important, business to big business. This includes angel investors, venture capital, and private equity. In general terms, each category covers a specific type of business – though there can be exceptions.
Angel investors tend to focus on early-stage companies with high growth potential. While these businesses are high-risk, they can also pay off in a big way. The next level of investment is venture capital. Traditionally, these investors were focused on early-stage technology companies. However, VC has morphed into something with is more risk adverse today and this means that it might not be the right avenue for most businesses.
The final category is private equity and this might be the right target for many small businesses – assuming they have potential for growth. A big reason for this is the explosion of PE firms in recent years and this has led to more money flowing into a broader range of industries than ever before.