Sell your product to raise money
Well, if you pre-sale your product and find a suitable buyer, then you can raise funds for your business in an effective manner. No doubt there are many successful entrepreneurs all around the globe, who have started this way and once they complete their target, they expand their business with funds they collect.

Yes, I know selling product is not as simple as having cup of tea but by following below-given simple steps may help you to solve your biggest problem for starting the business –

Step 1: Make yourself ready to sell your products. I know your first problem is collecting money to start production but as I mentioned above, you can pre-sale your products (This thing does not work for all cases but works in maximum cases).

Step 2: There are many online communities and websites which help you to sell your products and bring customers to your doorstep. Website like e-junkie can solve your problem, where you have to just follow a few steps to bring your product before your targeted audience and allow them to buy it. Always keep delivery time period in your mind before uploading your product details to the website. Ask a smart period of time to deliver your product so that you can get some time to deliver it (In case of premature production).

Support from family and friends
It is the traditional way and the most effective way in this contemporary world. You can convince your friends and family to invest or provide small business loan, which may help you to implement your ideas better, without any pressure. This way is much better than taking loans from any other alternative.

Instead of just borrowing from family and friends, you must state them how much money you need, what you’ll use it for and how you’ll pay it back. You may also think of drawing legal agreement stating that the person will indeed put money into the business. What kind of business you are planning start, strategy, plan and targeted goal.

While drawing your loan agreement needs to specify whether the loan is secured i.e. the lender holds title to a part of your property. In case lender being investor or joint business operation, role investor will play or specify it is an unsecured loan, what the payments will be, when they’re due and what the interest is. If the money is in the form of an investment, what role, if any, the investor will play. To be sure you and your family and friends have a clear idea of what financial obligations are being created, you have a mutual responsibility to make sure everyone is informed about the process and decide together how best to proceed.

Here, we can ask banks for a personal loan too. As per a research report by Omidyar in Africa, The personal and family loans are the main source of funding for accelerating entrepreneurship.

Loan from family is an important source to start a business

Business Startup - Family Loan Chart

Omidyar Accelerating Entrepreneurship Research Report

Double Dipping
You can always start a side business to raise fund for your business startup. In this way, you will not be under any kind of debt and burden and thus, it is the safest way to start the business.

Now days, Work freelancing is being more popular. One thing is pretty sure that you have some skill set or experience which you are going to utilize to run your business. Here, you can sell that skill to make some money in different freelancer websites i.e. Freelancer.com, LimeExchange.com.

For an example, you are an IT professional and you are able to do some technical projects then take the advantage of your skills and make some money to cut-off your business loan.

Angel investors
Angel investors may be good funding source for your business startup. If you are not able to raise fund from your family or friends or do not want business startup loan, then angels are best options for you. But always remember angels never they’re to invest in any business without seeing progress. They also keep away to exit when no profit. Angel investor never invest in your business without a careful investigation and a lot of research on your business plan.
Angel investors are careful about lending money, their team will go business potential and return on investment, This process takes months to be completed so don’t expect to get your money quickly. Many leading companies like Google and Yahoo have used it.

Angel Investor’s recognize you as potential business to invest with, to do that following few point helps;

Network with Business community: Angel investors need a  recognize you and your business in the marketplace, therefore very important to have associations with your business/industry or local trade groups as reference to your business.  By talking with their members and officials, you may find people who can point you in the direction of investors in your industry.

Call economic-development groups, their officials might be able to direct you to potential investor organizations. Some states have incubator organizations for young businesses, like Georgia’s Advanced Technology Development Center, which has several locations throughout the state.

Long time relationship:  “It’s a partnership — almost like a marriage,” says Mr. Massey. If you’re thinking about taking money from an angel group, remember that you’re going to be talking to the investors on a regular basis for years, so make sure you’re comfortable with them.

Potential mentors for Business: Most of the angel investors are business owners itself and ready to invest their money in other’s business.

Angel investors give you the required amount to startup the business and their knowledge acquired over period of time. You get a friendly environment and moreover, a better and quicker way to deal with business.

Micro-loans
You can lookout for various firms providing small business loans for the young entrepreneurs. These firms are generally better than taking business startup loan from a bank. In many countries, the government is more willing to bring people in entrepreneurship and providing microloans to start their own business.

For an example In USA – The Small Business Administration(SBA) established a Program in 1992 for businesses to avail the seeding fund to start. Other countries are also providing the same facility for businesses.

How to get it: As I mentioned above, Micro-loans are available through different government and non-profit organizations. Make a proper search over internet to find these organizations in your area and apply with required documents.

Keep few things in your mind before applying for micro-loans :
1. You should have a proper business plan.
2. You should have quotations and estimates for setting up the business
3. You need to show your capability to make monthly payments.
4. You should have planned to invest some of your own money.
 
Advantage of Micro-Loans:
1. Low rates and affordable monthly payments
2. No hidden fees or penalties for early repayment
3. Quick decisions
Get new order and deliver
There are number of entrepreneurs who receive the order from the customer but they are not able to supply, due to lack of money for production. There are some companies which provide loan in this scenario. With this, you will be able to raise funds for your startup, in a better way.
Cut out liabilities
Well, it’s another creative way to earn good money. For example, you can rent your home for a fixed tenure and raise a good amount of money. Many entrepreneurs have employed this way and were successful to earn enough money, to start their business.
Crowd funding
It is a very popular among entrepreneurs. In this, you can make a good use of internet by finding people having similar thoughts on investing with small amounts. Collectively these small amounts on adding up will provide you with a better alternative to startup your business.

Crowd funding has different segments –
1. Equity based
2. P2P lending
3. Donation based
4. Micro-loans

A research on increment of crowd funding over the globe in last 5 years, is enough to show the popularity of it among upcoming entrepreneurs. It is being the first choice of startups for landing money.

Crowdfunding Revenue By Segments(Millions of Dollars)
Business Startup- crowdfunding revenue chart
Financing by vendors
This option is very helpful to obtain the material, to sell your product. The manufacturers do not take any payment from you, till your product is sold. In this way, you get an extension to sell your goods, much efficiently.
Real estate
This is one investment which provides great output if done, after thorough research. Before investing your money, you should always do a little work to find out the current rates and take an informed decision. With this, you can raise money successfully, without complications.
Selling stuff
Well, sometimes it’s hard to sell out your stuff but as Jarod Kintz said “Instead of burning the midnight oil, you should try to sell it”. Sometimes, you have to compromise to achieve success. You can make good money out of it.
Credit card
If your are starting a business in small scale and want to decrease the high business loan, you can use credit card to finance your money. This is an easy way but it involves risk. If something goes wrong then the interest’s rate go up at a very high rate. For small scale business we can take this risk and can move ahead with proper planning to payback the amount.

A study says that borrowing against credit cards and loans from friends are two most common techniques adopted by business startup to collect seeding money.

If you ask me, I will say that loan from credit card has both the aspects – Good and Bad. Sometimes it may have a scary experience and sometimes its outcome may be rewarding. Kindly read all terms of Credit Card Company before using it for your business investment.