Starting a business is no easy task. While eCommerce has exploded in recent years, that doesn’t guarantee that your new venture will be a success. For that to happen, you need everything to break the right way, and that includes having enough funding to not just get off the ground, but to hold you into the near and possibly mid-future.
You can’t expect your early profits to sustain you, either. You may not hit the targets you’d projected, or some other factor could lead to slow sales to start off or extra expenses. It’s always best to have a lot of funding and not need it than to have not enough. Investing right can mean positioning yourself well for growth down the road as well as having a successful launch. Here are some ways that you can fund your eCommerce business in 2022 and beyond.
The world has never been more connected. You no longer have to go knocking on doors and making hundreds of phone calls to find people to fund your startup. Now, instead of getting a select few large investors, you can get many small investors as well to help with your costs. Crowdfunding has never been easier, and there are websites that will host your campaign. Be careful with this method. While there is little risk to you with crowdfunding, there is a possibility you won’t get what you need by the end of the campaign. That means you’ll have to search for other funding anyway.
Crowdfunding is certainly not a guarantee, and if your idea doesn’t connect with a large enough segment of the population, it might not catch on. Plus, it can be a lot of work to get the word out. Instead of trying for minnows, you can always approach wealthy investors to help with your business. An investor will give you funds to start up your company with the expectation that they will receive a cut of the profits when they start rolling in. This method is a great way to get funding and share the risk with someone else. However, you will also have to share your profits.
Many people try self-funding, and it can work if you have a lot of savings. However, you could find that your personal assets are at-risk with self-funding. Plus, getting funding from other sources can give you a safety net. With this method, you take all of the risk, but you also reap all of the rewards.
Business Line of Credit
There are several ways to borrow money. The most flexible is the business line of credit. As opposed to a straight loan where you get all of the money upfront, a line of credit gives you a limit up to which you can spend. You only pay interest on what you’ve used. This is a great option if you are unsure of what your funding needs may be going forward, and you don’t want to have to pay full interest on a large lump sum. You can have the money available if you lost some inventory or if you are a little light and need to pay the bills.
Getting a business loan is a very common method for securing business funding. You get a lump sum upfront, and you can make sure that all of your costs are covered until you can start paying it back. You can negotiate good interest rates, and once you have paid it back, you will have no other obligation. The profits just go back to your pocket.
There are several government programs that will provide funding for new and small businesses. They vary from state to state, and some programs have tough competition. The great thing about this option is that you do not have to pay them back, so there is little risk if you are approved.
There are new startups popping up all the time. With eCommerce, it has never been easier. However, you need to make sure that you have the funding in place to launch and to grow for years to come.