How to finance your Business
This is one of the crucial parts of building up your social enterprise! Each and every coin that flows into the company requires you to make a decision: should this be used to pay salaries, buy new equipment for production, invest in new opportunities, or something else?
It’s up to you how to direct the funds to salaries, profits or operations, or towards new opportunities. But what if the revenue of financing is not enough or if you need initial capital to get started?
For a social entrepreneur, starting out it can be hard to sort through the funding options available. Browsing the internet can help with ideas, so your social enterprise or start-up can access the funding to get off the ground.
Here there are a few ideas of how accessing economic resources!
Generally, you can differentiate between funding and financing. Funding is the money provided by companies or government sector for a specific purpose. Instead, financing is a process of receiving capital or money for business purpose, and it is usually provided by financial institutions, such as banks or other lending agencies.
When it comes to finding economic resources, nothing beats grants! Money has given to you, free of charge, so that you can invest directly in your idea. Obviously, locating these grants is extremely difficult, but you’ll never get a grant if you don’t try! UnLtd is an example of the places you can look at.
Of course, finding grants also depends on the type of your social enterprise. If, for example, you focus on environment, you could first check out the grant opportunities from your government or relevant NGOs.
Moreover, there is also growing support for small business start-ups in the form of competitions that encourage innovation by offering a large financial reward.
To improve your chance of success in these competitions, find ways to make your project stand out from the crowd. You’ll either have to present your idea in person or pitch it through an essay, so the idea itself has to be as original as possible. It’s all about the current trends and key words like digitalization, social innovation, design thinking and change making. Implement these in your pitch!
Crowdfunding instead is the practice of funding a project or venture by raising many small amounts of money from a large number of people, typically via the internet.
Crowdfunding has been used to fund a wide range of social and green entrepreneurship projects and it has exploded in popularity in the past few years, getting attention from both investors and businesses alike! But, all of this popularity also means an increase in competition, which means that unless your business can catch the attention of the matches, it will likely join the large number of projects that go unfunded on these sites each month.
Here it is a list with popular crowdfunding platforms where you can promote your idea!
People who are interested in ideas such as yours will rather look for opportunities to donate on such platforms. Sometimes, banks also support social ideas and crowdfunding initiatives by providing new platforms with good consulting.