According to recent reports, the level of confidence among small and medium-sized enterprises has plummeted since the Brexit vote. More specifically, confidences levels among SMEs have fallen by 27% quarter-on-quarter since June, leaving many unsure as to what lies ahead in the next year.
The issue is even more pressing for start-up brands, many of whom require significant investment if they are to successfully launch into their chosen market. Rather than seeking flight and shelving their plans, however, small business entrepreneurs should instead aim to seek out viable and effective funding options that can drive their venture forward during difficult times.
3 Unique but effective Funding Options for modern start-ups
So, let’s take a look at three unique but effective funding options that may prove invaluable to start-ups in the current economic climate: –
- Diversification and pre-sales
If your business is centred around a product innovation but has little else to support it at this stage, you can still generate income that can be reinvested into your venture. This can prove crucial, as it is difficult to raise funds when you have a product to market but no confirmed orders, collateral or equity within your firm.
One method of earning money at this stage is the diversification of revenue streams, as you look to sell through third-party affiliates as well as your own, independent website. While this will require to sacrifice some of your margin in the form of a 5% or 10% commission, you adjust your pricing accordingly and still benefit from an additional revenue source.
In terms of pre-sales, you can also look to sell formative versions of your products for a reduced fee through various outlets. This will generate income quickly and over a sustained period of time, helping you to develop an infrastructure and refine your finished products.
- Use Personal Savings to Invest and Generate Wealth
While some entrepreneurs choose to invest their hard earned, personal wealth into a venture that they are passionate about, this is a significant risk that places a huge burden on the success of your fledgling venture. This can be detrimental in some instances, particularly when you consider how successful firms rely on the type of intricate interdependences and intersections that are usually found in artwork.
This risk can be negated by creating an additional step in this process; however, as you use your savings to invest in more viable vehicles and use your subsequent earnings you fund your business.
From trading shares through an accessible platform such as FxPro to currency dealing on the foreign exchange, the financial marketplace is a diverse entity that can tailor to multiple strengths, ideals and risk appetites. You can also tailor your portfolio to carefully manage your funds and achieve the desired returns, while a fixed percentage of your gains can be reinvested into your business venture.
Let’s end with crowdfunding, which is far from being a new funding vehicle but one that remains extremely beneficial in the current climate.
Numerous, successful ventures have now been launched through market leading platforms like Kickstarter or Indiegogo, where start-up brands sell their ideas and solicit investment from like-minded entrepreneurs with similar passions. By clearly detailing your future monetisation strategies, target audience and long-term goals, you also improve your chances of attracting serious investors who can also add value to your growth plans.
In some instances, investment can even be secured without sacrificing equity in your company. This depends on the scope and the potential of your idea, however, as well as the alternative incentives you can offer to investors.