Starting up your business? Startups are a new brand of businesses that began during the 2010 era. Now, everyone has a chance to become an entrepreneur with only the proper amount of funding. However, how does one get proper funding? In a world filled with investors, angel investors and other capital gaining sources it can be a challenge to receive proper funding. In this guide, we target the first forms of investors: friends and family.
Your family & friends are the best form of early funding because they trust you the most. Do not damage this trust by over reaching the amount that you need to start your business. Instead, consider asking them a certain amount that you will need to achieve a certain level of your business plan.
Example: You need cash to pay for inventory, make sure to find the costs for the inventory and then asks for the minimum it would take to get through three months. By doing this you have a more accurate plan in mind and it will be easier to pitch to your family and friends.
Come up with a Repayment Plan
Understand that while you are still asking for investments from friends and family, it is still a business agreement. It is recommended that you clearly outline the potential risks that can come with investing in your business. This lets your family and friends understand what they are getting into before creating an initial investment.
Make sure that the agreement details the business plan, how the funds will be used, how progress will be made and how repayments will be made. Through doing this, you can ensure a higher sense of trust in your family & friends to invest in you.
Getting your family and friends to invest in you is simple! In fact, if you can pitch to them to invest in you, then it will be even easier for you to receive investments in crowdfunding and other forms of investments as your business grows. They are investors just like a large firm so make sure to approach them with the same respect and you just might make your startup goals.