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Small business begins with an idea. To turn that idea into reality takes money. Sometimes, it takes lots of money.
Not all small businesses can attract the funding they need. A therapist's office, for example, will not get much of a hearing at the local bank's loan window. The same is true for an art gallery.
Likewise, a start-up farm or landscaping business needing funds to get off the ground will be hard-pressed to find a loan. You either use your own money or you tap into a network of friends and family.
On the other hand, some business ideas can attract attention. Establishing a new wellness center in town can attract funding from the community it will serve. And a new computer game might get funded by perfect strangers looking to invest in technology.
Crowdfunding -- One of the hottest funding mechanisms today is crowdfunding. And it is being used to fund some operations.
Crowdfunding is exactly that. The funding dollars come from crowds of people unknown to you. You go on the net, tell people what you want to do, and the dollars might roll in from the crowds that see your proposal.
Or they don't. The successes that have used crowdfunding get lots of publicity. While the high fliers have raised mullions, most raise a few thousand at most. And some get no interest at all.
Third party businesses have sprung up to handle the process. They work like a dating service--sort of. Your business or idea needs funds. There are many out there who have a few extra dollars. The third party provides the platform where everyone meets and agrees to whatever rules apply.
To begin, do your research. Google "crowdfunding" and you'll get lots of possibilities. Among these, sort through the platforms you might use. Some sites you'll find are Kickstarter, Fundable, Indiegogo, EquityNet, Microventures, CircleUp, and Selfstarter. There are many more.
Some have minimums and some impose a time limit on the process. Others require an equity position in your business. Some won't take non-profits. And then there are those that just bet on the individual.
Know where you are headed before you jump into this pond. The platform in this business--is a business itself. Somehow, they must get paid for the service they offer. Dig into it.
Crowdfunding can be a godsend for your small business. Before you go for this, however, always do your business plan.