Becoming an entrepreneur can be one of the greatest ways to start the career that you’ve always dreamed of. If you don’t want to work for someone else and have a great idea for a business, an entrepreneurship may be the right way to go.
But first, you need to think about some different funding sources. Consider how much you need for your start-up. Be realistic about equipment, inventory, licensing, marketing and everything else. Before you can move forward, you need to have all of your expenses covered. Once you establish how much you need, you will be able to tap into a variety of resources to assist you.
As a business owner, you have access to many of the same funding opportunities as other businesses. The only difference is that, if you are under the age of 18, you may need a parent to co-sign to prove that you are trustworthy enough to pay back the debt.
1. Self-funding – You may be able to get the money you need from your own funds. Whether it’s from setting up a lemonade stand, babysitting the kids in the neighborhood or even having a yard sale, you may be able to fund all the money necessary on your own. Usually this will only provide you with a small amount of funding, so if you need larger amounts, you may need to combine this with some other efforts.
2. Friends & family – Ask some of your friends and family if they are willing to invest in your idea. Most of the time they will give you money without making you pay it back. Watching you succeed is typically all they need in the form of re-payment.
3. SBA – The Small Business Administration offers a wide array of loans and grants to small business start-ups. When you have a business plan, you can contact this division of the government to see if you can get a loan or grant. Loans you will need to pay back, grants are free money. Your parents must be on board with your idea and be willing to co-sign.
4. Crowdfunding – There are many websites like kickstarter.com, peerbackers.com and indiegogo.com that will fund innovative and creative ideas. These websites will also work with teenagers without thinking twice.
5. Venture Capital – This is the top way to get funding, but VCs very rarely finance teens. The best thing you can do is contact them with a business plan or prototype (based on what they ask for) and see how they respond to your idea.
6. Tech Incubators (also known as Startup Accelerators) – If you’ve got a technology idea, such as game as a mobile app or something else, this is a great source for funding. Check out: designed for hackers, ycombinator.com and techstars.com. They will often provide initial funding and potentially even help you with other assistance along the way, such as giving you pointers on prototypes and introducing you to investors.
7. Bank loans – You may be able to go the bank route and try to get a loan. Try the bank that you have a checking or savings account with if you’re already a customer. Just make sure to take a parent with you because they will need to co-sign.
8. Business plan contests – Entrepreneurial endeavors are increasingly common amongst teens and you can use this to your advantage. Look for local, state or nationwide contests being held. Usually the contest is based on the quality of the business plan, not age, so you shouldn’t have an issue. The winner and the first few runner ups are the ones getting funding. Various websites and magazines designed for entrepreneurs are constantly listing these contests.
9. Vendor funding – If your business idea involves other large vendors, contact them to see if they are willing to help fund your business. If they are heavily involved in the community and like your business idea, they may be willing to go along with it. If there is a trade to be made or they can make money from your business idea, they may not expect to be paid back, otherwise consider offering some sort of payment terms.
10. Client funding – If your business idea involves a few strategic clients to get started, see if they are willing to pay upfront for the product or service that you are going to be producing for them. As a way to thank them for their initial investment, you can offer up discounts for the future or give them some sort of special treatment.