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Where do you get the money to start the business?

I am a 11 grade student in high school student

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Rebecca’s Answer

I am glad to hear that you plan to start your own business. There are many ways to find the funding for the startups . Below are a few suggestions :
1. You could work and accumulate your wages for the funding
2. You can look for your friends, neighbour, relatives, etc. to invest in your business as shareholders
3. Do Crowdfunding online
4. There are venture funds who would invest on start ups
However, before you start your business, I would suggest your to do details analysis on the industry you would start your business and define the business model and execution plan. In item 4 above, you would need to present your proposal to their investment committee to decide whether it is justified to invest in your business.
Hope this helps! Good Luck!
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Francisco’s Answer

Hi Hannah!

This is a great question! I've never started a business, but as an MBA alumni I can tell you starting a business is a very complicated, yet exciting decision to make, and obviously money is key to be able to actually put your creative ideas and concepts into something physical. Here are some ways entrepreneurs usually get the money to start their business.

1. Self-funding: People might use their life savings, emergency funds, retirement account balances, etc to inject their business with funds. This is when people might use the money to pay for a prototype of their product, developing their app, or anything to go from idea to tangible.

2. Family and friends: Some people basically go and ask for the money from close family members or trusted friends who might or might not get some equity in the business, this means they might become co-owners in the business since they are helping it fund it. This is a safe way of gathering funds most people don't have in their bank accounts.

3. Business loans: Another options is building a business case and presenting this to a bank in order to get a loan. Basically you borrow money and do your best to pay it back with the profits from the business. Obviously this means you'll be paying interests and you might need to have some kind of collateral or co-signer to make sure the bank gets its money back, but this is another option available.

4. Crowdfunding websites: You probably have seen GoFundMe, KickStarter or Indiegogo, or at least heard about them in Shark Tank. This is basically when a company asks people to pre-order their product or just contribute to build the first batch of orders or to finance the business. Some great products have come from very successful crowdfunding campaigns as this allows you to gage the public's interest in your product, and get some sales before you even have a product. Obviously websites like these aren't free and they do keep a percentage of the funding received, but its a good tool for some kinds of businesses

5. Investors or Venture Hubs: Believe it or not there are people and companies entirely dedicated to finding businesses to invest in. Some cities even have government funded hubs in which they look for businesses to support or connect with investors. The idea is you pitch your business and someone gives you money for a percentage of your company in order to help fund it or bring you into the next stage. This is more for when you already have something started and you want to advance or bring something extra to the business, I wouldn't recommend bringing in investors too early as you would be giving out chunks of your company before you even have a proper company

Overall these are the generic ways of getting money for your business. Obviously things might be different depending on the industry you are looking at and the kind of business you'd like to start. It is important to understand that starting a business is not an easy task, and that failure is a common occurrence, but true entrepreneurs learn from their mistakes and overcome adversity to be successful. There are lots of resources from universities, government programs for small businesses, professional organizations, and some private companies that can help young businesses grow and connect with key partners, if you ever decide to start a business I recommend you look into those things in your area, you'd be shocked at how well organized some venture communities are.

Hope this this helps. Best of luck!