How to raise money for your small business

February 20, 2024
minutes to read
Ben Winford
Table of Contents

If you're launching a business, raising money is one of the most important things you'll have to do. But if it's your first time fundraising, it can be challenging to know where to start. While many funding options are available for entrepreneurs looking to launch a new venture or expand an existing one, finding the right source of capital and getting approved for it can take time and effort. In this blog, we'll run you through the steps you can take to get money to get your small business moving.

To raise money for your small business, you must be prepared and have a detailed plan in place. Before starting any fundraising efforts, do your research to determine your business's strengths and what kind of funding opportunities are available to you. For example:

  • Raising money from family and friends could be the best option if you have a great network of high-net-worth individuals.
  • If you have an existing business with good revenues and you want to expand it, getting a business loan from a bank might be best.
  • If one of your strengths is social media marketing, crowdfunding through a platform like Birchal might be a good fit.
  • Raising from a venture capitalist might be the best approach if you need a large amount of cash, such as $250,000 or more.
  • If you are working on something novel, you may be eligible for government or R&D grants.

Once you have considered your options, it's crucial to prepare, plan, and be ready to pitch your business proposition. Your ability to tell your story to potential investors and lenders is going to be critical. People are just as much investing in you as in your business idea, and they will want to have confidence that you know the ins and outs of the business.

To get started, you should develop a clear business plan. A business plan is a written document describing your business's strategy, marketing and financial forecasts. It also shows how you will use money from investors to help build the company. A business plan can be used to raise capital from investors or lenders, including banks and venture capitalists.

If you're seeking investment funds, don't just write up an idea on paper without thinking through every step of your proposed business model in detail before doing so. Investors will expect more than just an idea; they want proof that you have thought out all possible angles of starting up and running your own company before asking them for money.

A typical business plan will include the following sections:

  • Executive Summary: This is a brief overview of your business plan, highlighting the key points.
  • Business Description: This section provides more detailed information about your business, including its history, products or services, target market, and unique selling proposition.
  • Market Analysis: This section includes information about your industry, competitors, and target market, as well as market trends and potential challenges.
  • Marketing Strategy: This section describes how you plan to promote and sell your products or services, including your pricing strategy, distribution channels, and marketing campaigns.
  • Operational Plan: This section outlines the daily operations of your business, including details about your production or service processes, logistics, and any partnerships or subcontractors.
  • Management: This section describes your business's ownership and management structure, as well as the roles and responsibilities of each team member.
  • Financial Plan: This section includes financial projections for your business, including projected income statements, balance sheets, and cash flow statements. It should also include details about your funding requirements and any financial risks.

Once you've completed the business plan and calculated your funding needs, it's time to apply for funding. Reach out to people at your target sources. It's essential that you are selective about who you approach. You want to ideally speak to the decision-makers, whether that is someone at the bank or an angel investment group. Once you know who to talk to, connect with them online, call them up, and see if any of your connections are mutual acquaintances.

If you're lucky enough to have friends and family members willing to risk their money on your small business idea, you could get by without outside investors. Raising funds this way will likely be a faster and easier way to get capital, but be wary; if the business fails, you will lose the money of the people in your inner circle. This might create unnecessary added pressure on you while running your business.

Ultimately, though, whether through family or professional investors, one thing remains constant: whoever invests needs confidence that this investment will pay off over time.

Now that you've learned how to raise money for your small business, it's time to start. You can follow these steps and do it yourself or enlist the help of experts who know what they're doing when it comes to fundraising.

Either way, keep in mind that fundraising will always be a little stressful. But if you're prepared and have done your research beforehand, there's no reason why fundraising shouldn't be an exciting adventure rather than an intimidating ordeal.

DISCLAIMER: Team Thrive Pty Ltd ABN 15 637 676 496 (Thriday) is an authorised representative (No.1297601) of Regional Australia Bank ABN 21 087 650 360  AFSL 241167 (Regional Australia Bank).  Regional Australia Bank is the issuer of the transaction account and debit card available through Thriday. Any information provided by Thriday is general in nature and does not take into account your personal situation. You should consider whether Thriday is appropriate for you.

Why waste time on financial admin when Thriday can do it for you?

Already have an account? Login here
Thriday Debit Card


Live demo this Thursday at 12:30pm.