A sole proprietorship is one of the best ways to have the desired business freedom. You will have time to make a decision. You will decide when to open shop and when to take a time off work. But this doesn’t come without some challenges, one of them is raising capital.
Most times, financial institutions are unwilling to grant loan applications of sole proprietors unless they provide collateral, which is not readily available But there are other sources a one-man business can explore to raise funds.
If finance is your major impediment, we have a guide on how to set up a business with little or no money, you can find details at: https://infomediang.com/start-business-without-money
How To Raise Fund As a One-Man Business
While you do the planning alone, design the marketing strategies, you will also bear the full financial responsibility, here are the five sources of capital for a sole proprietorship:
Search and apply for business grants
Grants are financial assistance for small businesses and are typically the best for a man-man business startup. Grants do not require collateral, most of them only require evidence of business registration.
Ready to kick start? Search for companies, organizations, and individuals that offer grants in your location.
In Africa, Tony Elumelu Foundation (TEF) is one of the grants on the continent which has assisted hundreds of sole proprietors. Flourish Africa by Folorunsho Alakija is another private organisation that giving grants to business owners.
Explore angel investors
You can hardly find a bank that is ready to support a new sole proprietor. They can not take the risk of funding a new business.
That shouldn’t deter you. With a marketable and solid business plan, you can explore angel investors who are ready to support your idea with funds. Ensure to read their terms and conditions.
Ask friends to invest in your business
If you don’t have a large amount to get started, another route you can explore is by asking family members and friends to invest in your business idea.
Apart from your business plan, clearly spell out the terms of the investment. What percentage of the profit is your investor taking? Involve lawyers and be sincere with the agreement.
Consider Small Business Administration Loan
In a country like the United States of America, you can apply for SBA loans which is specifically designed to cater to the needs of small business owners.
SBA loans offer low-interest rates and easy repayment terms. You can get up to $50,000.
One of the requirements to access SBA loan include: 1) business must have less than 500 employees, 2) You must have less than $7.5 million revenue on average each year for the past three years, 3) Your business’ net income must be under $5 million after taxes among others.
Explore Your Skills
You can turn your skills into a money-making machine. If you are a content writer, there are hundreds of content marketing firms online that need the services of remote writers.
Some of them are ready to pay as much as $35 per hour for writing press release, one of them is AmpiFire, a content marketing solution firm.
You can explore other platforms where your skills are needed and where you can earn handsomely well to fund your sole proprietorship business.