Capital is a challenge for most startups. After you have done your market research and concluded on one business idea, you will need to raise money. This article will highlight a few common avenues where you can obtain seed funding for your business.
1. Own Savings
If you are lucky, you may have some savings from your previous work.
2. Borrowing from Family and Friends
Your immediate connections are your family and friends. Draft an irresistible business plan and approach them. If your business plan excites them and they are in a position to help, they will actually lend you the money.
3. Banks and Sacco Societies
There are many financial institutions in the country nowadays that include commercial banks and Sacco Societies. To successfully secure a loan from these institutions, when unsalaried, you must have consistently deposited your savings with it for some time say 6 months and above. However, if you have a few assets such as land or a car, you can use them as a collateral and secure the loan. Salaried individuals whose salary is channeled through the institution have a high chance of securing the loan.
4. Business Financing Institutions
There are institutions specially set up to provide funding to business people especially youth and women groups. Currently, Youth, women, and persons with disabilities can seek business financing from the Youth Enterprise Fund, Uwezo Fund, and the Women Enterprise Fund. See more details on their websites www.youthfund.go.ke and www.wef.co.ke
People are always in search of investment opportunities. Provided you have a smart business idea, you can seek outside investors to finance the venture. However, they will gain some control over the business depending on their percentage shareholding in the business. If you want to possess a 100% control over your business, then this might not be appropriate for you.