“There are many ways to go to Rome”. This saying is very relevant to those of you who are looking for capital to run a business. The proof, there are many ways to get business capital that you can do. The many ways prove that you can still try other ways to get capital if one method doesn’t work.
Capital plays a big role in running a business. All business activities such as manufacturing goods to marketing products require capital. The state of business cash flow even remains stable if you have sufficient capital stock.
The question is, how do you find capital to run a business? We will answer these questions completely as your guide. Listen to the explanation until it’s done.
Definition of Business Capital
Business capital is the amount of money used as the main capital for running a business. The term capital itself is any form of property in the form of money, goods, or assets that are useful in producing something that contributes to wealth. Essentially, capital is the main fund in the form of cash or property used to run a business.
Business capital Function
At first glance, it was explained at the beginning that working capital plays a major role in business operations. However, venture capital is also useful to strengthen the reputation of the company, such as by taking care of patents or stabilizing cash flow. See the explanation below to help you better understand the function of venture capital in a business.
1. Carry Out The Production Process
The production process costs a lot of money. You need to pay for electricity to run production machines or water costs to wash products to keep them clean and maintained.
2. Provide Raw Materials
Every product manufactured needs raw materials. You need sufficient capital to purchase raw materials from suppliers. Capital is also needed when you become a reseller so that you can get products for resale.
3. As a Business Deposit
The company certainly experiences unexpected events in its operation process due to both internal and external factors. Working capital is useful in this emergency as a business saving, especially when a recession is imminent.
4. Manage Licensing and Patent Rights
Managing business licenses and patents certainly costs a lot of money. Therefore, businesses need capital loans from multiple parties. Capital loans are needed so that capital from profits can continue to be used for production activities.
5. Stabilization of Cash Flow
Companies often experience situations where expenses are higher than business revenues. Additional capital is needed to keep cash flows stable and balanced. Stable cash flow is also a consideration for investors before investing in a business.
10 Ways to Get Business Capital That You Can Try Out
Working capital is not only raised from savings or personal assets. You can also get venture capital from various outside business partners, including the government. Apply below to obtain venture capital.
1. Sale or Pledge of Assets
You can start seeking business capital by selling your assets. These assets do not have to be house or car titles, they can also be electronic goods that are no longer needed. Another option is to temporarily pledge assets or securities so they can be redeemed later.
2. Borrowing from Relatives or Friends
If the capital from pledging assets is not enough, you can borrow money from relatives or friends. However, you need to make a black-and-white agreement to build trust between the two parties. Also, calculate the required capital accurately so that you can make the best use of it.
3. Use of Personal Savings
You can also benefit from personal savings accumulated long before starting a business. However, move funds from personal savings to business savings first so they don’t get commingled. You will also need to find a job or sideline if savings are insufficient.
4. Search for Government Support
This method can be tried for MSMEs that are currently running and not just starting. In recent years, the government has provided Direct Cash Assistance (BLT) to empower small and medium entrepreneurs. On the other hand, BLT is a means for the government to keep MSMEs stable and able to develop into large enterprises.
5. Search for Investors
Look for investors who focus on small business growth. You can find it through training activities, workshops, or participation in business competitions. Make sure you have a clear business plan or business proposal to convince investors to want to invest.
6. Submitting a KTA Bank Loan
The bank offers a variety of loan services to try depending on your business needs. You can try unsecured loans (KTA) so that you do not have to guarantee valuable assets. This method can be tried by inexperienced businessmen who do not have too many assets in it.
7. Crowdfunding
Crowdfunding is a way to get business capital that involves the broader community. Simply put, you get business capital from the community through certain platforms. However, you need to convince them that the business you are running is useful and capable of solving problems or challenges perceived by the community.
8. Search for Business Partners
Partnering with business partners can be a way to get effective business capital. It is just that you need to talk to them about the business to be run, especially about the delegation of responsibilities and profit sharing. Also agree at the beginning of the agreement, as both you and your employees have the rights to the business.
9. Borrowing from Cooperatives
Of course, this source of credit still exists in the community. You must first become a member of the cooperative before you can borrow money from the institution. Why? Because cooperatives are based on the kinship principle. By applying for a loan and paying the dues, you are already a prospective member of the cooperative.
10. Loans from E-commerce
This technique can be tried for those of you who open online stores on commerce sites. Several e-commerce sites offer credit services without a credit card that can be used as business capital. You just need to follow the procedures provided by e-commerce to get venture capital.
Now you can perform all business activities after getting business capital. Different types of business activities require capital, from manufacturing products to paying employee salaries, buying raw materials to implementing marketing strategies.
Speaking of marketing strategies: Has your company tried digital marketing? It cannot be denied that digital marketing is always the best choice to promote products in this digital age. The reason is that internet users know your product without knowing the boundaries of space and time.