7 Different Ways to Fund your Real Estate Startup

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Recent studies suggest that over 94% of new businesses fail to become successful during the first year of operation and over 96% within the first ten years of operation. One of the most common reasons behind this failure is lack of funding. Money serves as a primary component to fuel to all kinds of businesses.

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However, it is safe to say that there are countless ways to finance your new venture. It all depends on what works best for your start-up. There are many people who can help you with your business venture and guide you through plenty of different types of loan options so you can make the best decision.

You should also keep in mind that any type of funding can be a long process and some people might not be successful in obtaining their desired funding. Keep evaluating your progress and look for multiple options if one method doesn’t work for you.

Advances in information technology have created several efficiencies that have made collecting funds easier and accessible than before. However, realtors are often slow to adopt these methods than other professionals who have funded their startups by several methods.

Apparently, there are no reasons for property agents to start their entrepreneurial journey without the help of crowdfunding websites and workflow automation.

Here are 7 ways to help collect finances to fund your new business venture.

1.    Self-Funding

Self-funding is also referred to as bootstrapping. This is a great way to get things started provided you have saved enough finances from a previous job or venture. Entrepreneurs often invest from their own funds or ask their friends to contribute.

As your friends and family are more flexible in terms of interest, you can acquire a loan with fewer formalities and restrictions.

Generally, bootstrapping is considered as a preliminary funding option. However, this usually works if you plan on initiating a small business or do plan on generating profits from day one. Bootstrapping may not be one of the best ideas to launch big business ventures.

2.    Angel Investment

Apart from crowdfunding websites there are angel investors who are willing to fund startups and entrepreneurs to pursue their business ideas. These investors may screen thousands of proposals before investing in the right one so you have to come up with a really good idea.

Hundreds of renowned companies have taken help from angel investors to come into existence including Google, Yahoo and Alibaba. Since these investors are willing to take risks for higher returns this funding method can also be risky if your startup fails to generate the expected returns.

3.    Venture Capital

This kind of investment is generally ideal for small businesses that are already making big revenues. If a startup makes enough returns, investors are likely to invest into an idea presented by that business.

4.    Crowdfunding

Crowdfunding is another popular way to fund a business and has recently gained a lot of popularity. This idea works on funding business ventures that offer mutual benefits. These contributions from one or many individuals help an idea to grow financially so that all can benefit from when it materializes.

There are many popular crowdfunding platforms in America such as GoFundMe, RocketHub, Dreamfunded and Kickstarter.

5.    Bank Loan

Usually, a start-up begins its operations by taking a bank loan. There are two types of financing that are available for startup businesses; capital loan and funding.

Capital loan is required to execute a complete cycle of revenue generating operations. You must share the complete business to get a loan from a bank.

Websites like Kabbage help interested individuals to know more about funding and capital loan.

6.    Winning Contests

To help budding entrepreneurs and start-ups, there many contests that are organized by companies and business leaders. This is a great way to collect funds for your startup idea and to gain market exposure.

A large number of these contests require contestants to submit a proposal or business plan before entering. As a winner you have the opportunity to introduce your business idea and to attract donors to fund your idea.

7.    Credit Cards

Other methods of collecting funds for your business include using your credit card. These are one of the most reliable methods of funding your business. Make sure you maintain a god credit history to use your credit card for funding your business.

Final Thoughts

For keeping your startup profitable, it is important to grow your business naturally. Expanding before time can lead to a premature failure for many startups. Control your labor and production costs to keep your cash flow in line.

You should also add staff only when the business growth justifies it. Maintain a steady emphasis on outsourcing and automation. You should look for maximizing your marketing and business operations only when there is enough revenue. Mindset is also important. Having the right attitude is one of the ingredients for success in the entrepreneurship world

Lastly, all entrepreneurs must expect the investors to inquire about their past work history and accomplishments before they can fund a start-up. Entrepreneurs and budding businesses must discuss all details up front so no complications can occur later.

A post by Kidal Delonix (2497 Posts)

Kidal Delonix is author at LeraBlog. The author's views are entirely his/her own and may not reflect the views and opinions of LeraBlog staff.
Chief editor and author at LERAblog, writing useful articles and HOW TOs on various topics. Particularly interested in topics such as Internet, advertising, SEO, web development, and business.

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