Starting a Business or School Based Enterprise? Tips to Help You Secure Funding.
Funding your Business
The last step of launching your business is to fund it. As we learned from calculating your startup costs, starting a business is expensive. There are costs to launching your business and annual expenses that you will need to pay.
The big question to ask yourself is, where will you get the money? There are many ways to get funding: investors, self-funding, or loans.
Investors
An investor is an individual who provides financial backing to your company. In exchange for their financial support, they receive ownership or equity in the company. Some investors will provide the money but will expect it to be paid back like a loan.
Research investors in your community
Request a meeting and pitch your business plan (think Shark Tank)
Negotiate and finalize investment terms
Start receiving your investment!
This is easier said than done. Put yourself in an investors shoes, yes they are wanting to help businesses in the community but they are also looking to make more money back than they gave you through profit distributions from their equity share. Think of your business like a pie, someone gave you money to make your pie but when it is complete they get a small sliver of the pie back. An investor is someone who essentially bought a piece of your company and the only way to get that piece back is to buy them out of their equity.
Spirit Box Connection
An investor for your Spirit Box looks different than a normal investor. This could be a business in your community that may want to support your school as a “sponsor.” A sponsor is a business that contributes to something and instead of being paid back through equity, they are recognized by the place they supported.
Self-Funding
You can always use your own money. In many cases, there is no need to get investors or a loan. Funding the project yourself means that you do not owe money back to your debt repayments or to investors. All of the money you make stays within your company.
This is definitely not an easy option but not impossible. In order to get the funding raised you must:
Calculate the costs of your business
Figure out how much money you need to open your doors
Create a timeline of how long it will take for you to save these funds from the money you currently are making through another job, family, or friends contributing.
Spirit Box Connection
If you are wanting to self-fund your Spirit Box program, consider how you will raise this money. Many Spirit Box schools also have school stores. If you have a school store budget out a certain amount of profits that will be set aside to save for your Spirit Box. Many school administrations have budgets for curriculum and learning materials for teachers. Ask your principal if there is funding available for a project like this.
Loans
A loan is money that a bank or individual will give a business in order to help with the start up costs. In return for this loan, you must pay it back over a set period of time with interest (a percentage of money that is added to your loan every year). Interest is how banks and individuals make money from loaning you money. There is risk on their end by loaning you money. They are giving you their faith that you will pay them their money back.
Spirit Box Connection
Getting a loan as a Spirit Box school is going to be more complicated and probably not necessary. Since you are a school, there are many different funding opportunities that you can apply for such as CTE Funding or Perkins Grants.
Put it to action!
For your business or Spirit Box team, sit down and research the best way to fund your business. Weigh out the pros and cons of each avenue. Self-funding this project will take a lot more time but will save you the work of finding someone to help you fund it. Going outside the walls of your school to get your funding will more than likely expedite the process of getting funding but there is more work in finding this money.
At the end of the day you have to do what makes the most sense for you and your business!
Additional resources:
https://www.sba.gov/business-guide/plan-your-business/fund-your-business