When you are turning your idea into a business, you need funding. There are so many opening costs to get your business off the ground, so it is essential to find the right funding option.
Seed funding is the first round of funding a company gets to start its operations. The more you can raise initially will dictate how fast your company can develop. There are several sources of seed money that you can get for your healthcare business idea.
The first way is to use personal funds. If you have the resources, you could use your own money. This is a great way to show investors that you are willing to invest your funds. Some banks also require that you put in 20% of your funds before any other funding is available. You can use savings or sell assets but don’t risk your life’s savings to start the business.
Friends & Family
You could approach people that are close to you. Family and friends are great sources of funding and encouragement. They may invest, loan you money, or help support you in other non-monetary ways. If you ask for funding from family and friends, make sure they understand the risks involved and what terms you are giving them regarding ownership rights, payback terms, and the usage of the money.
Bank Loans & Micro Lenders
The standard way to start a business is a small business loan through either a bank or microlender. Traditional bank loans can also be back by the SBA (sba.gov). When you first start a business, both traditional banks and micro-lenders will likely want to see your business plan and how you plan on setting up your business. Microlenders are small lenders that give out microloans to new start-ups. You can work with non-profit organizations or private lenders to seed your idea, and both should have reasonable repayment terms.
Angel investors can fund your new business in exchange for equity. These are for larger sums of money and can become somewhat of a partner in your business. Angel investors can be advantageous as they can mentor you and help your operation succeed. If you use this type of funding, be sure that you understand your agreement’s equity terms.
In this new digital era, crowdfunding has become a quicker but less consistent way to raise capital for your business idea. With sites like Kickstarter, Wefunder, and AngelList, you can raise funds in exchange for perks and early access to your products and services. These types of websites are relatively new but can provide all your start-up costs if successful.
If you are not ready to fund your idea and would like to develop it further, check out our ideas on how to turn an idea into a healthcare business.
There are great ways to get initial funding for your new healthcare business, allowing you to turn your idea into a great, new start-up. medtigo is here to assist you with new business ideas, staffing, and administrative tracking, as well as training and mentorship. Call us today for more information.