Although it’s possible to start a business with $100 and a dream there will come a time when you’ll need extra cash to take your business to the next level.
Even if you consider your full-time gig to be an ‘angel investor’ in your business, financing is among the most common challenges that entrepreneurs face, leaving many feeling discouraged on how to transform their ideas into action.
But if your dreams are bigger than your cashflow, the bank may not be the first place that you need to turn. Here are some creative ways to inject some extra cash into your business.
1. Enter a pitch competition
Convinced that you have the ‘next big thing’? Put your presentation skills to the test by entering a contest or pitch competition geared to businesses within your niche.
The one thing I noticed when researching different contests is that there’s an abundance of competitions available for businesses in the tech space. So much so that it inspired me to create a competition for side hustlers in other niches. But until that launches, there are other unique contest opportunities for businesses that don’t require you to create the next Facebook.
Here are a few contests and resources to keep on your radar:
The Small Business Challenge
What would you do with $100,000 in your business and how would you help your community? That’s the question the Small Business Challenge poses to entrepreneurs in this annual contest sponsored by TELUS and the Globe and Mail.
Canadian Small Biz owners are asked to share the biggest challenge that their business is facing today and explain how a $100K grant would help them overcome it and serve their customers. A panel of business experts review all entries and the most compelling applications are invited to pitch their ideas to win the six figure prize.
Black Enterprise Elevator Pitch Competition
If you were asked to describe your business to a panel of investors what would you say? In the Black Enterprise Elevator Pitch competition, entrepreneurs are challenged to wow a panel of judges with a video pitch about their business, why it exists and how they’d use a $10,000 funding boost. The catch? You only get two minutes to plead your case over video. Here’s an example of the winning pitch from their 2014 contest
The top applicants are invited to pitch their businesses at the annual BE Entrepreneurs Summit in front of a live audience and panel of judges to win the cash.
To learn more and apply for their 2015 cycle visit: The official BE Elevator Pitch Website
If the two contest examples above are not a great fit for your business here’s a resource that can help you find a contest that is. BPC is designed to be an entrepreneurs one stop shop to find current contests, elevator pitch events and business plan competitions in the US and Canada.
Although I found the site to contain more US focused events, it does have several blog posts and tips to help contest applicants learn how to prepare a pitch and pitfalls to avoid.
In addition to potentially finding a contest in your city, there are also several listings for students that have entrepreneurial aspirations and contests geared to online businesses.
Check out this resource here: bizplancompetitions.com
Feel inspired to enter a contest? Here are some tips to keep in mind before you apply:
READ THE FINE PRINT. The big prize money that’s up for grabs? Sometimes it’s not a grant but actuallya loan so make sure you know the details before you apply. Grants don’t require the money to be paid back whereas a competition that offers financing as the reward will provide a low interest loan. You’ll usually be asked to consent to a credit check when you apply for these types of contests or programs so this should be your first clue that the money doesn’t come with no strings attached. Take a moment to read the rules of any program or contest that you participate in to see what additional asks may be required if you win.
RESEARCH PAST WINNERS. Increase your chance of creating a winning application by researching past businesses that have been selected as contest winners. Even if you’re not eligible for a particular contest now, it may be a good motivator of things that you can work on in the future or even identify if a particular contest is a good fit.
DON’T BE INTIMIDATED. Some contests, especially those with big prizes up for grabs may feel intimidating to enter but don’t let that stop you. For example, some contest applications may want to know how many employees you have in your business and if you’re a party of one, it may make you feel like you’re out of your league. However, a small business is defined as a business with 1-99 employees or in some cases (1-20) so even if you’re a solopreneur remember that you still count. Do you research and if you meet all of the requirements, submit your application with confidence.
BE PREPARED. Many competitions will ask you about your financials or if you’re still in the idea stage, what your plan is to make money. Have a solid grasp of the important details in your business including why it exists, how it helps people and it’s financial future
PRACTICE. If you’re selected as a finalist congrats but now is not the time to wing your elevator speech. Know the in’s and out’s of your business and be prepared for questions and lots of them. Keep your points concise and find ways to let your personality and passion shine through.
Lastly, here are a few resources to help you ace your pitch:
- 5 qualities ever pitch deck shares: http://startupcollective.com/5-qualities-every-great-pitch-deck-shares
- 6 Tips for Fine Tuning Your Startup Pitch: http://vergehq.com/2014/09/02/fine-tuning-startup-pitch/
Grants are financial boosts to your business that unlike a loan do not have to be repaid but can be a bit more challenging to find and obtain. Look no further than your local government which offers several grant programs for a variety of businesses but will typically need to meet a set of very specific criteria to be eligible.
Even though the grant process can be tedious, there are some unique organizations that provide grant opportunities for different types of businesses year round and without the complex paperwork. One of my favs is the Awesome Foundation.
With over 112 chapters in 25 countries the Awesome Foundation distributes a series of monthly $1000 grants to projects and their creators. Applications are accepted monthly and depending on the chapter involved you may be awarded the grant via selection by a local committee or asked to pitch your idea at an event against other applicants.
The Awesome Foundation has granted over $1 million dollars and counting to 1400 projects and is a great option to help bring your ideas to life.
To apply visit http://www.awesomefoundation.org/en/submissions/new
If you want to take a more hands on approach to funding your biz by leveraging the power of social media, crowdfunding maybe a great option for you.
Not only can it help give you a financial boost but it can also drive new awareness around your business and creates new fans and customers in the process.
Crowdfunding websites, such as Kickstarter and Indiegogo provide a platform for fans or “backers” to provide a donation to a campaign in exchange for gifts or ‘perk’ such as early versions of the product.
A successful crowdfunding campaign will not only give your business the needed cash, but enables you to get your customers involved in the process. A great campaign works when backers feel invested in the success of the project or business and feel confident that their money will be used as intended.
The key to a great campaign is a compelling story and great marketing. Sites such as Kickstarter won’t collect money from backers until the funding goal is reached so if the campaign ends and you don’t meet your goal, all of your marketing efforts will have gone to waste.
Before creating a campaign here are a few things to consider:
RALLY YOUR NETWORK. Be prepared to approach your family and friends once your campaign goes live. Launching your campaign with a few donations may help with getting others onboard to help.
CREATE AWESOME PERKS. Think of creative incentives to thank your backers. Most folks who stumble across your campaign may be swayed by the awesome gift so don’t ignore the opportunity to make your perks irresistible. Don’t forget to make sure that you can deliver on what you promise in a timely manner after the campaign has concluded.
BE SHAMELESS. This tip is inspired by vlogger Maya Washington, meaning don’t be afraid to step outside of your comfort zone. Asking strangers for money isn’t easy and during your campaign you’ll find yourself having to live on social media to get the word out. This isn’t the time to be shy so get comfortable with being uncomfortable and having no shame in asking for what you want.
PICK THE RIGHT SITE FOR YOU. Even though Kickstarter is one of the largest crowdfunding platforms it’s not the only option. Research other platforms in your niche to determine if they maybe a better fit for you. For example, Plum Alley is a platform created for exclusively for female entrepreneurs and if you’re creating a mobile app, perhaps Appbackr maybe a great choice for you.
Need some crowdfunding campaign inspirations check out:
Funding a big idea in your business can be a challenge but as the above examples show, it’s not impossible. With the right support and dose of creativity you can find a way to give your business the boost it needs.
What are some creative ways that you’ve used to give your business a funding boost? Have you tried any of the tips above? Share your secrets in the comments below
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