How Small Businesses Can Seize Funding Opportunities: 4 Tips

SMEs are the lifeblood of our economy, creating jobs and driving innovation in communities across the US. However the Bureau of Labor Statistics, 18% of SMESs fail to take off in their first year of operation, 50% after five years, and 65% collapse before they reach ten years. One of the most common reasons for this high failure rate is underfunding.

This article will show different ways of securing funding for small businesses.

4 Proven Tips To Secure Small Business Funding 

1. Weigh your funding options

Before you begin your journey of securing funds, you need to understand your business’s specific funding needs. Different funding sources are also available, so it’s entirely up to you to determine which ones best match your business needs.

Venture capital and angel investors finance high-potential startups in exchange for a slice of the business’s equity. Crowdfunding platforms, on the other hand, are ideal for obtaining funding from a large pool of people who believe in your business idea. Government grants and programs support businesses in specialized sectors or industries at the local, state, and national levels.

2. Strong business plan

A Harvard Business Review study revealed that having a stunning business plan before pitching increases viability before investors by 16%. Another DocSend’s Startup Index showed that venture capitalists now take only 3 minutes to consider your deck. And that’s assuming you succeed. 

Your plan should be simple, data-driven, and drilled down on your business numbers, USP, and market opportunity.

3. Nurture relationships with investors

Building ties with various investors not only paves the way to winning investor funds round after round but also makes operating everyday business easier, especially if you’re working with your board of directors. 

The best way to get funded on the best terms is to build rapport before you need their capital. At the very least, strategic relationships are built a year in advance. This period is when you’ll start prioritizing meetings and facilitating connections with founders of startup accelerators and angel investors.  

4. Follow up and be persistent

Once you complete the long and arduous application process and submit it, you might be tempted to sit back and wait for their response. But following up with the funding organization is important as it gives them the impression that you are committed to your business’ prospects and increase your chances of receiving the funding. Here are some tips for effective follow-ups:

• Send a thank you note to the funding committee, appreciating them for their time and consideration
• Check-in periodically with your potential funders to see if they require any additional information from you, but don’t inundate them with too many calls. One or two calls should be enough.
• Ask about future funding cycles even if they don’t award you the funds.

Conclusion

Whether scaling operations, investing in novel technology, or ramping up marketing campaigns, investor funding offers a much-needed financial stimulus. Fortunately, there are different ways of securing funding for small businesses. Of course, the application process may be competitive and rigorous, but the payoff far outweighs the risk of not trying at all.