When you have a project, that wonderful idea in your mind you would like to see come to life, then there are a couple of things you need to do in order to raise the funds necessary to make this happen. Every project requires some form of investment be it; time, finances, intellect or even just patience. It’s easy to get disillusioned by how good our project is that we forget to follow the steps necessary to ensure that our project thrives and survives. Keep in mind that there are great ideas which have failed in the past over just simple mistakes, and not all the ideas out there which are working are the best. There are still people who use pen and paper for all of their transactions, despite the fact that we’ve had computers for decades.
Worst ideas have succeeded, better ideas have failed.
There are wonderful ideas out there but it’s the execution which determines if a project is going to succeed or not, so don’t get ahead of yourself to think that just because you have a great idea, it’s automatically going to thrive but you have to be realistic and follow the steps necessary to at least guarantee its launch, this doesn’t matter which project or business you have. It could be a software project, a local business or even a shoe store.
Market fit test (PMF)
This is something most people don’t know which eventually leads to the downfall of so many businesses, in simple terms, market fit seeks to find out if you have a consistent amount of people who want and can afford your product or services. The phrase product-market fit (PMF) describes how well your product meets the needs of your customers. Does your product give the people who make up your market something they need? Do you have a sustainable business with customers that keep coming back? This shouldn’t be an assumption you make just by sitting in your room or just from some random people requesting for your services but you should be able to determine that there is a considerable number of persons searching for your services.
After all, if you’re not giving the people what they want, your new product or business might fall at the first hurdle. Having a great market is the most important variable in start-up success, since without a great market, even the strongest products and most brilliant teams can’t survive. Success lies in finding your market and supplying a product to fit it. The easiest way people do this is by starting businesses which are already established in the community (like restaurants, bars etc.), just by looking at the traffic coming into another business, it tells you that the specific business has already passed the market fit in that area. It can be risky to take a gamble by starting a new business in an area where it has never been done before, despite the fact that there are people who want those services, you might realize a little too late that they are not willing or even able to pay for them.
When you are comfortable with your idea generating revenue then it shouldn’t be too difficult for you to take a loan and even stake your house if you have to, but most people are hesitant to do so because, they aren’t 100% convinced that their ideas are going to succeed. If there was a guaranteed low risk way of earning a huge turnover in a short amount of time then everybody will go out taking loans no matter what they have to stake, since its guaranteed to come back, so if you are still hesitant to take a loan then maybe your project needs a little more thinking. Loans can be gotten from multiple places, not just banks, basically anybody with the sufficient resources will be willing to loan you some money, they just require the same reassurances as a bank. In order to convince individuals or even banks to give you a loan, you must show them your figures, projections and stats, let the numbers speak for themselves and not you. When they see that you are moving on the right track, even without staking anything, they would be more than willing to help you, but when the numbers tell a different story from what you are saying, then the hesitation comes in then. Don’t hesitate to take loans if you are 100% confident of your idea.
Basically, this means presenting your project to as many people as possible and convincing them to give you money in order to accomplish it. You are not liable to them in any way, and you don’t have to give them back anything. This can be done in multiple ways, from ear to mouth, sharing on social media, launching websites or using crowdfunding platforms like kickstarter.com, gofundme.com etc People will read about your vision, mission and strategies and decide whether they want to contribute to it. You can explain your idea to friends and acquaintances and get them to sponsor it. To put things in to perspective, a charity works essentially on crowdfunding and donations. It’s kind of different from donations in the sense that it’s limited for a specific period of time during which there is much advertisement, promotion and calls to action meanwhile with donations, there isn’t necessarily any campaign or time limit. In crowdfunding, you have to determine a period, come up with flyers explaining the vision and massively share to get people to fund the project.
Of course, it’s your project so how much of your personal contribution have you brought to it, you can’t just expect everybody else to be the one to invest in your idea and in some banks they even require you to put in 30% of whatever amount you are requesting as loan. You can’t just come and present an idea to people and expect them to foot the bill totally while you just sit with the idea, you must be able to meet them half way. You can raise your personal contribution through your job or your savings, that’s why every project takes time, the personal contribution is essential even for the brightest ideas. So get a job, work for a couple of years and raise at least half of the amount you need, that will bolster the confidence of everybody else to see that you already put in half the work, they should come just to boost your work and not kick-start it.
You can also find people ready to invest in your idea, since you believe so much in it, then you should seek to convince others to believe in you and your ideas as well and to invest some of their own income into it. They will now become an active or passive part of the project and you will be owing them part of the revenue depending on their contribution. In my personal experience, this is the fastest way to raise funds for a project but it does come with some setbacks, nevertheless it’s quite expedite. The question you should ask yourself in this case is that;
Do you want to have 100% of nothing or 50% of something
Finding investors isn’t that complicated, everybody out there is trying to have a side hustle or a business which gives them additional revenue even if it takes a couple of months, so they will readily invest in any lucrative business especially when they don’t have to put in any work.
This is different from investors because partners take an active role in the running of the business, they share not only the profits but also the work load. This can as well help you get started very quickly because you now have access to more resources in a short amount of time than you did before, you have access not only to the pockets of your partners but also to all the resources that they come with. This however takes away a lot of the control you might have on the business, you wouldn’t be able to make decisions on your own, the profits will be split but the losses as well. Nevertheless, this is the most efficient way of raising funds and launching a business.
There are always people out there who are interested in helping the dreams of others come to reality, when people see you doing any form of work which adds value to the lives of others, they will be more than willing to contribute to that vision but for this they must see you actually doing something already. Create a way in which those people can reach out to you with some help, either a bank account, phone number or card in which they can easily donate to your work and make sure to make it clear and easily accessible.
Here are just a few ways in which you can raise money for your projects, all of these methods are highly dependent on your idea, vision and strategy but the most important metric that everybody will look at is the income you are already generating. It’s often preferable to launch your activity however small it can be, get the feedback from users and use that feedback to convince all these group of persons. It’s much more difficult to convince anybody about an idea which is still on paper because even some of the greatest ideas have failed, on paper they looked promising but once they were exposed to reality they came crumbling. Ideas are quite important, but focus more on execution than anything else