Choosing non-tech startups means that entrepreneurs are not dependent on technology to run their delivery mechanisms. Airbnb, TaskRabbit, Macy’s, and Groupon are remarkable examples of this business type. If you think about following this suit, how can you get your company funded?
Here are six ways you should consider before starting off.
Outlining an Effective Business Plan
This is the first step to think about any source of fundraising because, without an organized plan, your business will fail. Moreover, it proves your credibility to investors and indicates the value you provide in the market.
If you’re unsure of where to start, go for veteran entrepreneurs in business clubs. They are experienced enough to tell you how to build a business plan which is attractive to potential lenders.
The key is researching your market and analyzing potential customers. Ask the most specific questions about your industry as much as possible. For example, questions like “What industry am I in?” are not detailed enough. “What role does my company play in the time sharing industry?” is better and gives you answers which become crucial parts of a business scheme.
Using Crowdfunding Sources
Crowdfunding sources are where you get donations from an online community, and of course, you need to persuade them that your business plan is worth their pennies. SeedInvest, AngelList, and Indiegogo are websites non-tech startups should consider to seek small investors.
The next step is to write a statement to your potential donors. Most people think creativity is the best way to woo backers, but they are dead wrong.
First and most, you need clarity. Donors want to know whom they’re talking to and why they should help your company with money. In other words, you have to introduce yourself and your company.
Write the company’s mission and vision in compact sentences—and be specific with your points. For example, instead of writing, “my company is in the advertising industry,” you break it down with “we are an agency helping clients run their advertising campaigns in the United States.”
Don’t forget to drop a hook at the end of messages, motivating backers to fund your company. If you want to balance your heavy deficit budget, the statement will end like, “clients love our service and don’t want to see it going down, and your investment at this time is crucial to liven it up.”
Balance Your Finances
The main funding at the beginning comes from you, and if you keep spending on unnecessary items, your company only exists in dreams. You should consider your financial management an exercise before dealing with bigger problems in the startup. If you cannot even control your personal expenditure, how could you run your business?
In the bigger picture, non-tech startups have to balance their budget by reducing personal debts, saving money as much as possible, and having a specific payment plan.
You should keep your day job to get by and raise some funds before creating a business. The best way to fund your startup is by saving your money and using it only for the business plans (not on expensive parties and other unrelated).
Support from Your Friends and Family
Friends and family can support you in two ways; potentially providing income, and sharing their expertise to help grow your business.
Seek out friends and family for advice about fundraising. Their teachings could save you a lot of money because you don’t have to hire professional consultants. Additionally, some of them may be a potential source of fundraising with a friends and family round. Moreover, you can borrow money from them to start a non-tech startup.
The bottom line is that you must make payments on time when you use this method. Don’t lose good relationships just because of money. You should borrow just enough for your startup and think carefully before taking any fund as a loan.
Bootstrapping means that you use your money without external investment.Your savings account is the main source to raise funds. The good news is that most successful entrepreneurs, if not all, save a lot to build their empires from a little money. When you use your pennies, you have total control to decide your business plans.
The best way to utilize bootstrapping is by moving step by step with your spending because you are the only one responsible for risks, such as lack of financial options, credibility in the market, and more debt when your business plans don’t go well.
Good fundraising for non-tech startups requires patience and sensibility, and the Aspire360 team is always ready to help you with quality coaching and training for startup founders and CEOs.