‘An Entrepreneur Without Funding is a Musician Without an Instrument.’

A collation so apt, few can condemn it. Even if you are a music maestro – if you don't have an instrument to prove yourself, you are just like any other man. Similarly, even if you are a good entrepreneur and don’t have the funds to prove how much profit you can make, your claims will all be considered false. Funding is the spinal cord of any business; without it you are not stable. Funding not only directly affects the development of the business but also helps to improve its products, services and technology. A business without funding would continuously go into debt. 

Are funds really that important?

The seed money that is required to get a business going is only provided by funding. Seed money, as the name suggests, is very important. For a plant to grow and bear fruit, seeds are really important – similarly, for a business to grow and make a lot of profit, seed money is required. It is the money allocated to initiate a project. Basically, without the seed money, no business can start.

The cash flow that a business needs is fulfilled by funding. Cash flow means the day-to-day expenses of a business, like salaries of the employees, bills of office, insurance installment, and the like. None of these can stop, and neither should funds.

When a business starts growing, expansion in the form of a new location, advanced products, etc. should be carried out. These things can add up to the expenses which could be fulfilled by funding. 

The research that is needed to be done by the business owner or people of the team also requires tools. When done with good research, the business gets better customers and makes better profits. Therefore, the tools should be brought. These tools can be brought with the help of funds.

How to get funds?

Try bootstrapping at the very beginning. Bootstrapping means finding or more appropriately, raising and saving, funds for your company. History has witnessed a lot of businesses bootstrap till they started making profits. Funding your business with the money you have will only save you from all the loan-related stress. When you fund your business yourself, you have the power in your hands to invest in things you feel are important. You are not answerable to anybody for the allocation of money for a particular thing. 

Before getting the external funding, you could ask your friends and family. While it may seem a wild approach but even if the relatives are unable to fund the entire project, they can get the ball rolling if the project looks interesting to them. You can even explain your business plan to them. This will make them involved with the project. When relatives and friends get involved in the project, they start seeing it as their own. Taking funds from relatives and friends will also save you from paying huge amounts of interest which have been the case if you would have taken a loan from the bank.

Exploring different funding sources will also help you in the long run. Alternative funding sources like micro-loan organisations will help you. Search about the funding schemes provided by the government. Start-up India and Make in India schemes of the Government of India could also help you get the funds. 

Crowd-funding is another option that is gaining a lot of popularity nowadays. The idea behind crowd-funding is that you list your business idea on a crowd-funding platform and the people interested in your business idea will approach you. Therefore, at one particular time you will have multiple people funding your business. There are rules and laws related to crowd-funding that should be strictly followed. This funding idea is very helpful for you and is becoming quite popular in India.

Angel investment is another option you can consider if you are looking for funding as well as the right guidance for your business or start-up. Angel investors are people who have surplus money and are on an outlook for a good business idea to invest their money in. They not only provide funds but also give you advice and guidance. A lot of businesses and start-ups have been invested by angel investors. The names of some of the biggies include Google, Yahoo and Alibaba.

Whatever be your way of getting a fund, it doesn't matter. What matters the most is whether you have reliable and long-term funding at hand. Funding is the fuel that keeps you moving forward. Don't miss out on refuelling your vehicle from time to time to avoid getting stranded.

The author is Co-Founder, Alpino Health Foods

DISCLAIMER: Views expressed are the author's own, and Outlook Money does not necessarily subscribe to them. Outlook Money shall not be responsible for any damage caused to any person/organisation directly or indirectly.