Ways to access funds for startups

Ways to access funds for startups

1. Approach a bank

The foremost accessible source is to visit a bank wherein you already holds an account and shares a good customer relationship with the bank. Bring your business plan to the loan officer and get access to loan if you qualify for a loan. If the bank denies your small business loan application, you could also try to get a personal line of credit from that bank.

2. Approach NBFC’s

Non Banking Financial Corporations (NBFC’s) can be approached to access financial services who would not have access to conventional banking services. NBFC’s are engaged in the business of loans and advances and thus provide banking services without meeting legal requirement/definition of a bank.

3. Seek informal sources

Startups can seek help from their friends and family. Some entrepreneurs have stated that loans from their family contributed to their success because they had extra motivation to not lose the investment.

4. Venture capitalists

Venture capitalists are those who are willing to invest in the early stages of your startup/ company in exchange for an equity share. Sometimes they also provide with some other resources that can lead to further growth of the company.

But research and statistics shows that venture capital firms are typically drawn towards startups in software and technology sectors.

5. Angel investors

They differ from venture capitals. Angel investors provide capital to startups and their funding can also be exchanged for convertible debt. Angel investors can take an equity share of your startup in exchange for their investment, their funding can also be exchanged for convertible debt. Secondly, angel investors are likely to supply funding to businesses when they are still in the early stages, whereas VCs typically get involved a little bit later.
Angel investors may also provide you with expert advice and management skills. Some of the popular Angel investors in India are- Indian Angel Network, Mumbai Angels, Hyderabad Angels etc.

6. Accumulate personal savings/ Bootstrapping

If becoming an entrepreneur is your only aim then start saving as early as possible and dip into your personal savings when required. Apart from this you can also use your money saved up for down payment of conspicuous consumption.
This idea is suitable only if the initial requirement is small. Some businesses need money right from day one and for such businesses, bootstrapping may not be a good option.

7.Crowd funding

Crowd funding is gaining popularity these days. Entrepreneurs or startups can use crowdfunding websites to raise capital. It refers to taking a loan, pre-order, contribution or investments from more than one person at the same time.
Some of the options are- Kickstarter, AngelList, CrowdFunder, RocketHub, Fundlined etc.

8. Business Incubators and accelerators

Business Incubators nurture the business by providing shelter tools and training and network to a business. Accelerators do more or less the same thing but it helps to take a giant leap unlike Business incubators.
Some of the popular Business Incubators and Accelerators are- Amity Innovation Incubator, Startup Village, AngelPrime, Villgro, CIIE etc.

9. Participate in contests to raise fund

Such contests help to maximize opportunities to raise fund for your startup. Participation in such contests also enhances knowledge and encourages further business ideas.
Some of the popular startups contests in India are- Microsoft BizSparks, NASSCOM’S 10000 startups, Lets Ignite, Next Big Idea Contests etc.

10.Government programs for startups

The government of India has launches a host of programs and schemes to boost innovative startup and employment in India. For example- 10,000 Crore Startup Fund, Bank of Ideas and Innovations program, MUDRA scheme etc.
Further, the various state governments have also come forward to encourage small businesses with various programs like- Kerala State Self Entrepreneur Development Mission, Maharashtra Centre for Entrepreneurship Development, Rajasthan Startup Fest etc.

Why do so many startups fail?

Why do so many startups fail?

1. Failure to create a market

Gone are the days when MR= MC was the ‘only’ business strategy to sustain in the market.

Sometimes the startups fail to create a market or consumer drive to purchase their product.
One reason might be the focus on generating profits rather than enhancing the market size. They may not be able to create compelling enough value propositions, or compelling event, to cause the buyer to actually commit to purchasing.

Secondly, sometimes the market size for the product is simply not large enough.
Lastly, the startup may enter the market in the wrong time; either too early or too late.

2. Product problems

Another reason that companies fail is that they fail to develop a product that meets the market need. This could be due to strategic problems or failed geographic expansion.

To sustain the startup the product should not only cater to the needs of the customers but also it should also focus on the customers who acquire a taste of it over time.
For this, up gradation of the product over time with regard to market demand and requirement is must.

3. Poor management

The entrepreneur finds it difficult to organize the management unit efficiently. The managing team is often weak on strategy; building a product that no-one wants to buy as they failed to do enough work to validate the ideas before and during development.

Moreover, sometimes the managers are a poor controller of the startup and less willing to contribute in prospering the business. This further weakens the lower sections/ departments of the enterprise.

4. Lack of capital and investment

One of the reasons behind the failure of startups is they ran out of cash. The primary reason behind this is that banks are reluctant to lend to startups.
Also, venture capitals prefer investing in a limited number of startups to prevent themselves from losses. In other cases, if a business has scaled well, but needs additional funding to further accelerate expansion they fail to generate enough investments from external sources due to lack of familiarity in the market.

5. Failure of business model

Sometimes entrepreneurs fail to create an adequate business model on the extremely optimism based assumption that customers will beat a path to their door. But it becomes an expensive task for many of them to win customers and eventually, it increases the cost of acquiring the customers.
So it is mandatory to monetize beforehand a strategic way to acquire customers at a significantly higher level to outdo the cost of acquisition.

6. Inadequate marketing

“Jo dikhta hai vhi bikta hai”. Startups fail to realize this old adage.

Insufficient and inadequate marketing is a common failure among startups.An anticipation of the target audience and the ability to convert potential customers into leads is one of the prerequisite for a successful startup. Many startups fail to materialize this due to insufficient funds and unwillingness.

7. Fails to create network

Apart from poor marketing, lack of network with investors and other stakeholders impede startup growth. Entrepreneurs often fails to utilize their network for the growth of the startup.

In addition, rather than exploring the prospective networks they become prey to asymmetric information regarding their networks.

Popular myths about startups

Popular myths about startups

1. Needs huge fund to start- off

Entrepreneurs believe that all they need to start- off their business is a huge amount of funds. In fact, many recent surveys state that investors and venture capital fund only one percent of all the startups.

In order to burst the myth, one should adapt to the practice of bootstrapping, which allows maintaining full control of the startup strategies, avoiding time delays and energy spent to attract investors, and retaining maximum equity.

2. PR activities are unaffordable

These days, startups are spreading all over the place, and have made it possible to afford and access startup PR tools and services. Not only there is an option to buy such services, but you can also offer yours along with a product in return for a written review.

3. Corporate setup can shackle Startup potential

One should know the fact that early corporate training courses along with potential customer contracts and getting real-world marketing experiences are really important for a budding entrepreneur to steady his/ her ship. In addition, regular paychecks and further benefits of working in a corporate setup help in building useful resources between or before setting up a startup.

4. Local incubators spring most successful startups

An incubator helps to get over hesitations in the initial stages, by connecting with advisors, peers and guiding on how to set up your own business. On the contrary, most good founders of a startup proceed faster on their own, by not draining their time on peers and programs, and with no equity dilution.

5. Success stands on the pillars of great technology

Early adopters love to indulge in new technologies, but mass market customers desire for solutions, not technology. Startups can taste the success without having high-tech sources.

6. Make the product your priority and then proceed with business work

Business experts recommend starting marketing first to confirm that they have real customer interest and an appealing product concept. In addition, good marketing and support plans can take as long as product development. In fact, both should be done parallel to each other.

7. Difficult to compete against big companies

It is mandatory to understand the needs and niche of your business. This makes you act in a creative way and helps you being agile in such a way that you can experiment with the personality of your brand. Being faster and more efficient is all you need to leave your competition behind. Keep track of other big organizations and fill the gaps, whenever necessary.

Two of the ways through which you can market your company is, setting your startup for the audience that falls under the required niche, and build long-term relationships and increase the lifetime value of each consumer by building up brand loyalty.

8. Investors are in search of great design

Technologists forget that investors are buying a chunk of the business, not the product. Every solution needs a business team first who knows how to market, distribute and support the product.

9. Marketing is a necessary evil to sell weak solutions

Nowadays everyone relies on marketing and social media to find solutions to match their needs. Even the best technical solutions often fail due to lack of good marketing. For innovative solutions, marketing is the education consumers need in lieu of experience.

10. Paradigm-shift solutions lacks competition

The real competition to a new paradigm is the old paradigm. If there is no competition, investors see no market, meaning no customers, slow growth and big marketing costs. Mention paradigm shift only with other technologists.

How to get customer’s attention?

How to get customer’s attention?

1. Use different mediums

One of the best medium to attract the attention of your potential customers is to use social media platform. You may use many of the available social networking sites for instance- Facebook, Twitter, Instagram, YouTube etc.

2. Listen to your customers

Listening to your customers is a great skill because this would reflect the market needs and will attract more customer attention. As a result, the connection with your customers would improve.

3. Give attention to seek attention

The entrepreneurs should give attention to the potential customers. It is more likely that they will receive the attention reciprocally.

4. Be unique and realistic

Being unique is the best way to attract potential customers. As an entrepreneur you need to be realistic regarding what your customers think and want.

5. Identify the ideal client clan

It is important to have a vivid picture of what type of customers you are seeking as an entrepreneur. It is advisable, therefore to focus on the target and avoid broad and vague statements.

6. Discover your customers’ locality

Explore the expected location of your targeted customers and nudge them accordingly. Where you look for customers will depend on the nature of your business. Forums and social media pages are some online platforms. Apart from these online platforms conferences and conventions are a great offline source to meet plenty of potential customers.

7. Know the nitty- gritty of your business

Having a firm knowledge about the company and product is proved to create a positive impact on customers. Due to informative attitude towards your product you can attract interested clients. The people who would be interested in your offerings can see how knowledgeable you are and will seek your assistance.

8. Go for direct response marketing

Try to create advertisements that attract your potential and ideal clients by giving them something of value for free to get them started in your funnel. To materialize the advertising strategy learn about direct response marketing practices. Further, create compelling messages that tell your ideal audience why they’d have to be a fool not to work with you. In addition, you can use other various gimmicks to encourage them to believe in your company and product/ service.

9. Build and create partnerships

Come in contact with big businesses/ companies that offer complementary services. Thus you can and take advantage of creating an effective edge over others in the market. Beckett suggests. “Focus on building human relationships. The stronger your relationships are, the more likely your customers will be to tell their friends about you. And, the more likely they’ll be to come back.”

Ways to start small businesses from home with Low/No investment

Ways to start small businesses from home with Low/No investment

1. Blogging

People who are interested in writing content can set up their own blogs using online platforms like WordPress.org, Tumblr, Gator, Squarespace etc. and thereby can earn money from home.

2. Freelance content writer

Being a freelance writer you can offer your writing services from home to other companies and blogs and thus can earn success.

Apart from this people with profound knowledge in specific matter or subject can write e-books. Some publishers allow free publishing while others charge a meager amount. Thus if somebody is not interested in freelancing can go for writing e-books and thus can earn a share of the income accrued.

3. You Tuber

The social networking site allows anybody to create an account free of cost. There you can create video content and share it with people and thus earn money based on the number of subscribers and viewers. Uploading a video content requires a mobile phone, computer or some other technical instruments easily available.

4. Educational platforms

People with profound knowledge of subject matter and required qualification can get themselves registered with educational platforms like Unacademy or Byju’s and can teach millions of students and people from home.
For registration one requires to send a video of teaching to the concerned platform and have to complete the prerequisites for the same. It is a great source of earning from home.

5. Social Media Influencer/ Manager

People with major influence on social media are using this medium since ages and are strengthening their influence overtime so as to offer their services to brands that are looking for influencers to promote their services or products.

Moreover, you can also manage social media accounts for other business entities and corporations.
Thus you can earn money by being a social media influencer or manager.

6. Seller on e-commerce sites

People with creative minds can sell their creativity on sites like eBay, Amazon which may include doodles, paintings, crocheted items, handmade decors etc. thus you can earn money for your creativity and earn huge success through such online e-commerce platforms.
In addition, you may also sell your used books and earn more money so as to make more.

7. Virtual assistant

People can also start a Business to Business (B2B) business where they can handle various tasks of the concerned clients online from home.
So thus they can work as a virtual assistant and earn money.

8. Tutor

You can also work as a tutor and can teach students at home.

9. Web designer/ Graphic designer

You can work as a graphic designer and can use some free cloud based tools to create graphics for companies or clients if you have a good eye for design.
Also, you can work as a web designer and offer services with the help of free sources.

10. Tax Filling and Preparing

People with financially sound knowledge of taxes and finance can help companies and clients in filling their tax returns and norms. Moreover, they can also assist in tax related financial matters from home via online.

11. Designer

If you are a good designer then you can upload your designs for shirts, T-shirts, and other products on sites like CafePress wherein you can register and create a free account.
Thus you can earn money when those products are purchased by customers.

12. Data entry provider

You can also work from home for clients and business entities and provide them with data entry services. Thus in return, you can earn money.

13. Event planner

Highly organized people with event planning and management skills can work as event planners. You can build your contacts and organize office parties, birthday parties, wedding planning, reunions, etc.
The more you organize the more it will help you to build up a strong database and contacts. Thus by event planning, you can earn money.

13. Travel booking service

You can also help out people in booking travel conveyance and can charge money accordingly. You can also build contact with tourists’ sites and work as a travel booking agent from home.