You have just struck upon a unique idea for a business and you are feeling on top of the moon. It takes a great amount of courage to put all your efforts into bringing your idea to life. Sorry to break your bubble but that is the easiest part! Once you have decided to make your idea workable and turn it into a business, the challenges begin. The most important and toughest challenge being the question of raising funds and the right time to do so.
The first and most important thing to learn is that being an entrepreneur is tough enough and trying to be a successful one at that is probably ten times more difficult. If you were to ask any of the successful entrepreneurs the question about when is the best time to raise capital for your business, you will get one of the two answers:
- You should ideally raise funds for your business much before you know you need it!
- The best time to raise funding for your business idea is when you really only need it!
Now, what may surprise you is that both of the above answers hold true and that is really how businesses work. Actually, speaking both answers make complete sense.
There are two ways to explain this, when liquidity is low in the markets, raising money for your business may seem like a sign of weakness. In this situation, obviously, do not raise money unless you have to.
On the other hand, when the liquidity is high and people are pumping money back into the system, you will find that people are looking for clever ideas to put their money in. In such cases, raise money and do it on your terms.
- If you are in the initial stages of your business, take only so much as you need to get to the next big point. This could be from friends or well-wishers. This is the learning and the iteration stage and hence will benefit from a short burst of funds.
- You can always raise funds from Venture Capitalists or Banks but you will have to undergo quite a bit to raise a few funds.
- If you are adept at trading online, you can make a quick buck through Options Trading. Knowing how to trade on websites such as HBSwiss will help you earn money which can be used to fund your business.