Financing a Small Business

A great idea can spark the imagination of any budding entrepreneur. In order to nourish these brilliant ideas, appropriate financial resources will be required. The value of an initial investment will depend on a multitude of factors; the product or service that is being offered, manufacturing costs, expenses on entering the market, ongoing overheads, and any appropriate salary payments, to name but a few. An entrepreneur may not have to consider many costs at the start; it may be as simple as funding research around an idea. As time goes on, however, a small business will begin to require resources to keep itself going. It’s important to plan ahead for these from the start. Every entrepreneur wants their business idea to be a success; proactive forward planning will certainly help to achieve that.

In this article, we’ll explore some of the financing sources that may be considered by any entrepreneur looking to transform their brilliant idea into reality.

Dip into savings

One of the most straightforward ways to fund a small business is to dip into personal savings. Of course, taking a chunk from the safety net can present its own dilemma, and any action taken will depend on individual circumstances. However, if a budding entrepreneur has sufficient cash in their reserves, and it is financially viable to pursue an idea independently, there are benefits in terms of liability. If things do not go according to plan, there are no other stakeholders to whom explanations must be given. Equally, if the business idea is successful, the entrepreneur will not need to divide profits with anyone else. Embracing this approach is the least complicated method of financing a small business.  

Find an investor

If utilizing personal reserves is not an option, an entrepreneur can set about finding an investor to help fund their business plan. Depending on the terms of an investment, this can unburden the entrepreneur from the direct financial risk of pursuing their idea. However, agreements with an investor will also likely incur a loss of absolute control of the business. That is, most investors will look to own a stake of any business into which they channel their resources. Of course, they will wish to protect their investment, and may expect to make an input in business decisions. This may be an intimidating prospect, and must be considered before an agreement is made with an investor.

Crowdfund online

With the advent of crowdfunding sites, it is easier than ever before to connect with financers across the globe. Crowdfunding an idea will still make an entrepreneur liable to their investors, but the expression of that liability can take an infinite number of unique forms. For example, instead of a monetary dividend, entrepreneurs may offer their investors a free product, discount, or associated service.

Take out a loan

If an entrepreneur is looking to retain complete creative control, whilst avoiding use of their own savings, they may consider taking out a cash loan. If you are considering financing your small business with a cash loan, visit to discover your options.

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About Dequiana Jackson

Dequiana Jackson, Founder of Inspired Marketing, Inc., helps overachieving women entrepreneurs conquer limiting beliefs and create marketing plans that grow their businesses. This includes one-on-one marketing plan development, digital product creation, web design and content marketing. Dequiana is the author of Know Your Business: How to Attract Ideal Clients & Sell More and runs the award-winning blog,

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