Opportunities for business financing have exploded. Long confined to bank loans and a few public institutions, today there are many ways for entrepreneurs to start their business.
Before you start : define the amount needed & cost your project
Before finding money, it is worth determining what amount are we talking about .
If you are not quite sure that you have identified your needs. C onsult the sheet ” quantify my need for financing “
The 1st source of financing for all companies: their creators
At the risk of breaking open doors, the first source of financing for start-up companies is the founder(s).
And it offers a lot of advantages:
You retain great freedom in the organization of your business by not necessarily having to follow up with outside investors
No interest charge or provisional repayment is to be expected , because this money belongs to you. CQFD.
You can build up this reserve of savings, for example by freeing up your 2 nd pillar or personal savings previously set up.
Be careful, however, not to invest all of your savings in your project! Indeed, we recommend that you keep an amount that will allow you to deal with unforeseen events for you and your loved ones. For this, evaluate the money to advance in case of glitches in life and make sure that you and your family will be protected from need. Starting a business is risky enough not to create even more complicated situations for you.
A part-time job at the same time is also a good solution to finance you while waiting for your new activity to meet your needs.
2nd source of funding: your friends and relatives
And yes, they have always been there and support you in your approach. They can also support you financially. There are several possibilities here:
Here too, think about the elementary precautionary rules. First , have transparent communication with your loved ones about the risks of your project and the possibility (especially in the context of the loan and the equity investment) of losing their investment.
And above all, even if it is friends or relatives, it is essential to be clear and to communicate in writing the rights and responsibilities of each one. Have these documents signed by everyone involved (including you) and keep them safe.
3rd source of funding: Crowdfunding platforms
They have exploded with the rise of online communities and today, many companies use them as a springboard to raise money, and also – which is very significant – to make themselves known.
A very popular strategy is to use them as a test market by offering pre-orders of your product.
Their operation is simple:
You create a funding request on their platform by setting a fundraising goal (eg CHF 20,000) in which you explain why you need the money and what you plan to do with it.
You indicate the “compensations”, namely what you offer to the people who will choose to give you money (this can be gifts or even your product in pre-sale !)
You make noise and communicate around your collection to attract people and thus encourage them to participate.
At the end of the period indicated, the collection is closed and if you have reached or exceeded your goal, you receive the funds! You still have to honor your counterparties.
Here are the main ones:
Most platforms take a commission on the amounts paid by your contributors, take this into account in your calculations.
It’s not because you are launching a fundraiser that people will be scrambling to participate , think about advertising!
4th source of financing: Loan and micro-credit organizations
There are several organizations in the canton of Geneva that can help you finance your business .
Fondetec is a foundation dependent on the City of Geneva whose mission is to promote job creation in Geneva, in particular through its support for entrepreneurs .
The FAE (Foundation for Business Assistance)
Close to the fondetec in terms of mission, the FAE depends on the canton. It also offers financing, based on the guarantee of bank loans as well as cash financing through advances on payment of your invoices.
MSS (Swiss Solidarity Microcredit)
A Swiss foundation, Microcredit Solidaire Suisse can support entrepreneurs for sums of up to CHF 30,000 at a rate of 4%.
In conclusion :
Remember, most entrepreneurs cover their needs through several sources of financing. The important thing is to clearly define the need and be able to justify it