Forget about Funding...
Have you heard of first world problems? They are the entrepreneurial equivalent of “How do I get funding?”.
When coming up with a business idea most people’s first thought is ‘how do I fund this?’. In my opinion this is the WRONG place to start. The first question should be, do people need/want this?!
No mater how brilliant an idea you have, if people don’t want to buy into it, then you will fail. So before stomping down the path of, loans/grants/overdrafts & equity investment it is imperative that you test market demand.
I suggest doing this by trying to sell something before you have built it. This is a method employed by some of the most successful entrepreneurs in the world e.g. Bill Gates licensing Ms-Dos to IBM watch ‘Pirates of Silicon Valley’ for more info.
For any kind of business; waterproof cycle clothing that you can wear to work, a social network for lawyers, or a fake tan self applicator for your back, you should consider crowd funding it.
This is a really easy and fast way of testing market demand.
Make a video about your proposed product/service (no business plans needed),
Set a funding target (how much do you need to make this happen?)
List your idea on Kickstarter (link www.kickstarter.com). It’s a site where people donate money in return for a reward, usual a product. If you reach the funding target you get the money and can start building your service. If you don’t reach the funding target then all the money is returned to the donors. Some sweet kickstarter campaigns are here.
To help in selling your idea you might want to, make a simple website for free with www.wix.com, survey some of your customers wish www.surveymonkey.com , reach out to people you know using email marketing www.mailchimp.com. All are free tools that you need NO FUNDING to use ;)
Perhaps you already have a business up and running and need to sell some equity in your company to finance growth. Then it’s worth having a look at equity crowd funding. CrowdCube (link wwww.crowdcube.com) has been in this space for a while and new comer Share In (link www.sharein.com ) focuses on connecting angel investors to start up businesses.
There are also plenty of niche crowd funding site: solutions social entrepreneurs should check out www.crowdmission.com, while educational projects can be funded through www.sponsorcraft.com.
Don’t let funding be a barrier to a great new business, if your idea is a good one your customers will help you to get it off the crowd. So start selling and stop wasting your time on funding applications.