Creative Approaches to Find Financing for New ProjectsApril 9, 2013 By: Brian Speed
So you have this great idea, concept, business plan, venue location, experience, team, and all you need to bring it to life is the funding. Sounds like a piece of cake right? WRONG! Without question, the most difficult task to complete is raising Capital. Below we’ll discuss some creative approaches in reaching your goal of obtaining financing. Please keep in mind the extreme difficulty of this task. Most people will have to work day and night for long periods of time for even the slightest possibility of getting financed. However if you dream big, execute the proper channels, work hard, anything is possible.
Family & Friends
Your best shot is going to people who already know your skills, passion, drive and experience. You may have a family member or friend that is well off and willing to help. You should approach them first before anyone else. Do not take for granted that you know this person. It could be your Mom, Dad or your best friend. You still need to come prepared and show them this project is worth investing in. If they can’t help you financially, they could always give you advice or make an introduction that could be beneficial.
Six Degrees of Separation
You need to take every opportunity life gives you to Network. Pretend there are two crystal balls, one to your left, and one to your right, your phone rings and a friend says’ “Hey we are going to this Lounge tonight and doing bottle service, are you in?” You look at the crystal ball on the left and you watch yourself say “no I am really tired and I am going to call it an early night.” Then you see yourself go on Facebook for non-productive time to look at friends pictures, and then you pass out on your couch. Not getting you any closer to your goal. On the other hand, the crystal ball on the right has you saying, “Yes, pick me up in 45 minutes.” As you watch the crystal ball to the right, you see yourself making the best of the situation and mingling with the table next to you. As the two parties mingled and started a conversation, they got to know each other by asking, “Where are you from? What type of business you are in?” When you replied I’m in the nightlife and bar business one of the guys jumped in and said, “Really my cousin has been looking to open a Lounge like this one with better service and décor, he has the finance, but we really doesn’t have the experience,” Now, you see where we’re going with this. Seek out every opportunity to network as it could be at a club, bar, restaurant, school, work, online at the grocery store, on vacation, or anywhere. Exchange business cards and always tell people who you are and what business you’re in. You never know what will come of it.
People in the Industry, Conventions & Trade Shows
A good way to find financing is from people in your Industry. Once you’ve proven you can handle responsibility and can produce a solid business idea to someone who knows your value, you have a chance. It could be someone you worked with or for, or someone you just met who happens to be in the industry. Go above and beyond every minute of every day. When you don’t think anyone is watching, they are. There are so many opportunities out there where nightclub and bar owners, may want to finance projects and they could be looking for someone to operate there venue. I would also advise going to as many Nightlife Conventions and Trade Shows as possible. You can not only find the financing that you need but you can learn a lot more about the industry that you might not have known.
Online Networking & Crowd Funding
Technology has made the world smaller. The means of reaching out to people you would have never known, is incredible. You must take advantage of this. Linkedin is a networking site for business owners and management. Many CEO’s, Angel Investors, Venture Capitalists frequent this site. You should be on this site networking on a daily basis. Facebook and Twitter are also good places to network your business and gain more exposure. Meet new people, network and keep in mind six degrees of separation. Personalized messages as opposed to generic messages are always best. Crowd funding is the funding of a company by selling small amounts of equity to many investors. Kickstarter.com is the most popular one; however they have a very detailed platform, which does not include nightlife. If you Google the criteria you are looking for, thousands of startups, business broker, crowd funding and other websites will pop up. Depending on your criteria, pick and choose the one you feel would work best for your project.
There are many Government Programs, Financial Institutions, Venture Capitalists or Private Investors who would loan you the funds you are seeking for your project. If you are not familiar with the term “skin in the game” you will hear it often from anyone you are seeking a loan from. Skin in the game, means they want to see you put up a portion of the finance. Having good credit, assets, a track record, and a solid business plan will be your typical needs for a loan. Keep in mind; it is difficult to get loans for startup nightlife projects. Real Estate or operating businesses with good financial numbers will give you a better chance of getting a loan.
There are many creative approaches to finding financing for potential projects. In this world, you create your own destiny. There is no such thing as luck. You put yourself in positions to succeed. The world is yours!