10 Ways In Raising Capital for Business

Many are swimming in the ocean of poverty today for lack of idea of what to do.  Unfortunately, those who even have ideas are crying for fund.  It is this gap that this book aimed at filling.  If you have idea of a business that can take you out of your financial prison, then here is a list of 35 ways to raise money to actualize your dream business.  Friend, let’s get started.

1. Personal Saving

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This is the most important aspect of any business capital.  Before the birth of any business idea, there must be a way to save some money towards it.  Today, it is becoming increasingly difficult for people to save out of regular income. You hear people say, ‘how do I save from something that is not even enough?’  It has been established that if a man cannot save when his salary is just three digits, he will still not be able to save if it is increased to five digits. 

 2. Buying Goods on Credit

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Many have started their businesses by using this method.  This method is limited because whoever wants to give you goods on credit must have known you for some time and probably have some dealings with you.  In business world, people test before they trust, and once you disappoint, it becomes difficult to regain their confidence.  However, many are still out there who will not mind helping you with some goods on credit with the hope that you will bring the money to time and carry more goods.  

 Two pieces of advice are important to users of this method:  One, if someone helps you with goods on credit, be sure your word is your bound and fulfill your promise.  Do not abscond with people’s money.  It is their sweat and God will fight for them.  In addition, you destroy your chances of getting more help in future and those of others.   You can with confidence go out now and try asking for some goods you long to sell, you may be surprised some dealers/wholesaler will help you.

As you collect goods on credit, take care of the person’s money and your profit.  It is your profit that will eventually become your business capital in future.

3. Bank loan

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Opportunities abound for business people to get loan from the bank.  It may be difficult, but it is not impossible.  Depending on the needed amount, some banks will request for your written business proposal.  All they are looking for is the viability or profitability of the business.  Understand that every good business proposal requires the input of experts.  The reason for this is because, if what the bank is looking for is lacking in your proposal you cannot get the money.  Some banks also ask for collateral or guarantors.  

4. Bank Overdraft

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Bank overdraft is another form of load; but this however is given in addition to what you already have in the bank.  If for instance you have #30,000 in the bank and you urgently need #45,000 for a business transaction, the bank can give you the money.  The extra #15,000 is an overdraft which you have to pay later with interest.  

One thing about overdraft is that it is given for a very short time, sometimes as short as just one month.  Overdraft is good for quick business opportunities that come once in a while and involves getting in and getting out within a week or three.  Penny Stock is a good example of a business you use an overdraft for or the buying and selling of Hard currencies. Sometimes, Dollars crash against Naira and you know it will regain its strength in the next one or two weeks, in cases like these, you can collect overdraft to buy some.   Selfish and unprofessional government policies have brought about these opportunities and many have taken advantage of it to make wealth. 

5. Sales of Properties

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To fund their dream businesses, many sold some of their properties.  Out of two plots of land, one can be sold to fund a very viable business opportunity.   Some years ago, a young man sold his television and radio to start his business.  Today, he has a house of his own out of the gains from the business.  He can in addition buy many television sets because he is now financially buoyant than he was then.  What is the benefit of television to a man who has no vision of future financial security?

Two pieces of advice are very important here, one, make sure the property you want to sell is your own otherwise you will go to jail.  Two, make sure the business you are entering has promise of profitability otherwise you will lose at both ends.

Do you have a property to sell? I will recommend Dapo Olaiya Consulting

 6. Cooperative Society

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Organizations, institutions and even governments are becoming increasingly disturbed by the level of unfaithfulness of individuals that they now prefer to deal with groups.  As a result, cooperative societies are gaining ground all over the nation.  Currently, Lagos State of Nigeria was reported to have registered about 20,000 cooperative societies in just two months for the purpose of small business loans that the government set aside for the people.  

Forming and running a cooperative society requires some knowledge.  It is therefore important to first get the knowledge or include someone who already has the knowledge as a member of the group.  Some groups even employ experts to help them run the society and place such experts on salary.

 If you are not a member of any cooperative society yet, join one.  Most of the financial aids and assistance that are coming from government and banks today go to societies instead of individual.  If you are interested in farming, look for a farmer cooperative society to join, if you are interested in marketing, join marketing cooperative society.  Where these societies are not available in your area, form one with people of like minds and get it registered.

7. Friends and Relation

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“What are we friends for” is a popular slogan in the mouth of friends.  Having a dream business and friends to power the dream is a joyful thing.  Good friends and relations have been very helpful in making people get started in business world.  

Having such people around you is a test of how well you have connected with people over time.  If you have been a good friend to people, have maintained good relationship with relations and have helped others in their life achievement, they will certainly not hesitate to help when it comes to your turn.

One good thing about loans from friends and relations is that it is interest free.  One bad thing however is that where the giving and the receiving of the loan are not well spelt out, friends may see themselves as co-owner of the business in future, particularly when the business growing very well.  It is therefore advisable to spell things out clearly at the time of borrowing.  Never get too desperate to the point of collecting loan without agreement.

8. Partnership/Investment Club

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Partnership and investment club are other ways of getting your dream business off the ground.  You have the idea; I have the money, then let us work together.  For the purpose of small business, you can go into partnership with few other persons.   On the contrary however, the more partners there are, the more hectic it becomes to control the business.  Five people can partner together to start a business of Hundred Thousand Naira with everyone contributing just Twenty Thousand Naira.

Take these pieces of advice. Do not base the strength of your partners on the amount of money they contribute.  I have seen partnership where someone did not contribute any cash but he brought the idea and others contributed money.  Eventually the idea turned out to be very great and brought a lot of money to the group. Idea sometimes is ten times the strength of money.   Never go into partnership with someone whose source of income you do not know.  He may just be a criminal.  

Never go into partnership without a written agreement (money destroys friendship), Never go into partnership without the focus of what you want to achieve.  Never keep the business money in a private account, open a separate account for it with at least two signatories.  Finally, when you notice that the partnership is becoming bigger, allow God to do with it, whatever He decides.  Many Great companies today started as a small business somewhere.  

9. Financial Grants and Aids

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There are a number of agencies and NGOs that are giving people fund for the purpose of establishing business.  I bought an electronic book some weeks ago that contain some international organizations that are helping people across the globe in the area of business and general financial empowerment.  Look for such agencies, read about them and see if your group is qualified to apply.  You may just be surprised that your application will be granted.

10. Sales of Shares

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If you have invested in stocks before and a new business opportunity opens up, you can simply sell part of the share to fund the new business.  Note that I emphasized part, the reason is because you can never tell whether you’re so called new business will turn out well or not.  Every business step is a risk but some risks are called calculated risks and such risks are not bad in any way.    

If for instance I have a share of 150,000 Naira, I may decide to sell off half to fund a newly discovered business opportunity which I have thoroughly investigated and received expert advice.  The profit from such can be used to buy more shares in future.

This 10 ways of raising capital can be more than what I provide above. More ways of raising capital will be release as we understudy them.

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