We rarely get to come across women entrepreneurs that succeed as much as the men in in the male dominated business world.
One of the major reasons most start-ups and small business led by women entrepreneur’s fail is due to insufficient funds and the mis-management of finances.
When it comes to women entrepreneurs sending out applications to secure business funds, the success rate is said to be 18 per cent higher than that of men.
But despite this success rate, most companies led by women entrepreneurs avoid seeking business funds from alternative finance sources. Overall, due to men making 84 per cent of the funding applications, they tend to receive the majority of the funding awarded.
Not only that women entrepreneur’s avoid applying for secure funds, they also seek less money on average when they do apply.
It only shows that women entrepreneurs are better at putting forward a funding proposal for their small business or they have a more fundable business. Either of the ways, the success rate does encourage women entrepreneurs to secure funds and make their small business more sustainable.
We understand that raising funds for your start-up or small business can be one of the most frustrating and discouraging aspects, especially when it comes to women entrepreneurs.
But it all depends on how you present your idea in front of your potential investors. However, finding an investor is certainly possible, but start-ups and small business (especially led by women) should also look for multiple ways for raising capital for the business.
Here are four great ways that you can explore:
1: Friends & Family
There are times when people invest in a person and not their idea, and who do you think knows you better? Obviously, your friends and family!
So when you are seeking funds for your business, turn to them first as they are most likely to support you and your start-up than a complete stranger. Securing funds from your friends and family initially can at least get your company started.
However, there are certain drawbacks to this approach. If at your start-up fails, there may be problems in the relationship you have when them. To ensure against such awkward situations, we advise you to be very clear and upfront about the risks involved when you seek funds from your friends and family.
On the other hand, it is recommended to seek funds from those you feel can afford the loss or would be at least mature enough to handle the truth. It is the wisest thing you can do.
One of the trendiest ways one can raise funds in the world today is through crowd-funding. It is ultimately nothing but a brilliant way to raise funds from individual investors.
There are various sites that receive lots of small donations from commoners which they then push to fund start-up projects or existing business where cash expansion is required.
In return, the investors here either receive an innovative product or service or something else that both the parties mutually agree on. Eventually, it is a win-win situation for everyone, especially for companies that cannot secure funds through traditional loans.
Alternatively, there are other funding option like debt funding from Angel investors, capital firms and accredited investors. You can research online for specialised individual in this particular area that can help you through.
3: Business Partner
What women entrepreneurs can do is to team up with other start-up entrepreneurs to start a joint venture. For the matter of fact, most successful business owners today mostly started out with business partners.
In a joint venture, funds are pulled together which lessens the money burden that you have. You do not have to be worried about falling short on resources just because you have insufficient funds. However, when selecting a partner for your business you need to ensure an alignment of goals.
The reason behind having aligned goals is that any potential differences of opinion among you two can lead towards business failure. So it is the business of both the business owners to make sure that all the parties concerned in this merge agree to the direction the business is going.
4: Save Costs
We save money to have more money, right?
Financial crisis for any business can be burdensome and scary. Business owners also get nightmares about it. This highlights the importance of positive cash flow in a business. To save yourself the heartache, you can save costs on your operations so that at the end of the day/month, you have some extra money to run with.
Another way you can save money is by sharing office spaces. Although this concept is a little complex, if most of your work is online, having a large office space is a complete waste of money.
Moreover, when you have share office space, you also get to share utilities such as computers, printers, copiers and even the coffee machine. Leave out capital purchases until they are absolutely necessary.