Big or small, every business needs one thing: money. If you’re a teen entrepreneur looking to find funding for a new business idea, you probably know that your age can prove to be a challenge when trying to find financing. If you’re trying to find creative sources of cash, here are a few ideas for you.
Bootstrapping, or investing your savings into your business, involves significant personal risk. However, it can be one of the easier ways to get a business on its feet for teens. Whether you save your allowance or your earnings from a part-time job, investing your own money to cover upfront costs is a great way to get started.
If you don’t have the savings to cover your upfront costs, you may be interested in obtaining a microloan. Traditionally, these loans, which are usually less than $15,000, have low interest rates, so they’re an excellent option for new businesses. If you’re interested in obtaining a microloan, you will be interested in sites Kiva and Accion, which connect budding entrepreneurs to funding.
Similarly to microloans, crowdfunding is another way to raise smaller sums. By using platforms such as GoFundMe or Kickstarter, you can ask your network to support your business by donating. Be sure to write a compelling description of your business and what you will do with the funds you raise to get the most donations!
Grants, or money which doesn’t need to be repaid, are another great way to boost your business. Grants are offered in various sizes and can come from either the government or private companies who wish to promote innovation. If you’re looking for a grant, you will want to investigate websites such as grants.gov or contests such as the FedEx small business grant contest.
If you are looking for a significant sum of money, you will need to find an angel investor, a high-net-worth individual who will privately invest in your company in exchange for equity. If you’ve never encountered this term, think Shark Tank! As a young person, it will be tough to convince an angel to invest, so you’ll need to make sure your product is developed and that you can articulate an effective pitch before you try to find one.