Though many people often have brilliant ideas, they lack knowledge on how to get funding for a project. The number of applications that funders get is increasing by the day. Equivalently, the gap between unsuccessful and successful applications continues to narrow. Before you make your way to convince a funder to prioritize your project, there are some essential tools that you must have at hand. Here are some tips that might help.
Gather Enough Knowledge on Your Project
Before you convince a funder to inject money into your project, it must be discussed, and mind mapped. Your project will have to be talked about and consulted on by as many people as possible. You, the project owner, need to be convinced about the necessity of this project before you can pitch to anyone else. Doubting yourself will only make the funder lack confidence in your idea. This way, you might end up not securing the funds. It is essential to clearly explain your project to the stakeholders involved with funding so that they can come to a consensus.
It is also as essential to know your project if you intend to post it on a crowdfunding site. The general public is often harder to convince. You should, therefore, present your project in a way that they can relate to it. This will increase the likelihood of gathering funds to realize your project.
Have Your Project Proposal at Hand
It is vital to thoughtfully design a project proposal before you pitch your idea to funders. Having a well-crafted project proposal also relatively eases the process of application writing. In your proposal, you will have put down all the relevant quotes, examples, and statistics. You do not have to struggle for hours researching on these when it comes to application writing. With a well-put down project proposal, you only need to summarize a few quotes and explain how the project meets a particular need in the application. In fact, a funding application should be the summary of a complete project proposal.
Outline the need, and the ability of your project to meet it
It may seem obvious to know the needs or gaps that your project will tackle before designing it. Needs, however, tend to be complicated, especially if you are tackling a big project that needs a huge funding pot. If you do not clearly outline the need and the ability of your project to meet it, the funders may be unconvinced about how realistic your project is. Grant writers have a tendency of overpromising and underperforming. You stand a better chance of success if your application is practical.
For example, if your project is aimed at reducing unemployment, outline the aspects of unemployment that you wish to reduce. It is more realistic than claiming that your project will reduce employment in a particular region. It is often unrealistic to claim that your project will singlehandedly solve a problem, no matter how small. Stating this will decrease your chances of securing the necessary funds.
It would be best if you convinced your funder that you have an in-depth knowledge of the need that is at hand and its complexities. You also have to present a comprehensive understanding of the limitations and capabilities of your project. When presenting your proposal to funders, ensure that you go deep into the specifics of your project. Likewise, if the funder feels that you are proposing less than you can accomplish, you are unlikely to succeed.
Be Passionate About Your Project
Before funders can conclude that they will inject money into your project, they tend to look at how better it will meet a particular need compared to other projects. Though the use of statistics is one way to determine such an advantage, it is becoming less reliable by the day. That is why funders are more interested in finding out if you are passionate about the project. They are keen to know about the design and development process of the project.
When presenting your project for funding, it is essential to highlight specific information such as your target group and the challenges that they may be facing currently. Ensure that you also point out the impact that the project may have on them and the stakeholders involved in making decisions about the design of the project.
Now that you have gathered all the tools necessary to convince your potential funders to inject money into your project, you need to go out and approach potential investors. Here are various sources where you can get funding for a project you believe in.
An Online Company or Local Bank
If you are wondering how to get funding for a project, approaching the local bank that serves your personal banking is a great option. Alternatively, you can explore online companies that fund projects or give business loans. Starting with your local bank is recommendable because you already have a relationship with the organization. Conduct exhaustive research on the procedures that one has to follow to secure a loan from this bank and set up an appointment with the relevant officer.
On the appointment date, ensure that you show up on time and that you are well prepared. Dressing professionally will make the loan officer take your idea seriously. Ensure that you carry your business plan as you will need it to explain to the loan officer the amount of funding you need and its uses. If you are unsuccessful in securing a business loan, you can try to get a personal loan from the bank or from an online credit company. You could also try other financial institutions or banks if your first attempt is unsuccessful.
How to Get Funding For a Project from Family and Friends
Many entrepreneurs in the United States have acquired their start-up funding from family and friends, and so can you. Your family and friends are people who trust and love you. Moreover, they believe in your potential and want to see you achieve great things. Do not shy away from asking for a loan from your loved ones. Unlike online companies or banks, your friends and family will probably lend you some money without asking for interest. If you are lucky enough, you might get your project funding as a gift.
Ensure that you are continually informing your friends and family about your project, and don’t be afraid to ask them for funds when the need arises. Though this approach has its downsides, some entrepreneurs say that acquiring loans from their family and friends contributed to their success. They had extra motivation to lead the investment to success son that they do not let their loved ones down.
Venture Capitalists
They are firms that invest in a company in its early stages in exchange for a share of its equity. Entrepreneurs who opt for this option must be ready to part with a portion of their business. It is not necessarily a bad thing as shared equity means shared risks. Moreover, such firms have vast experience in the world of business. They can, therefore, provide your company with other resources that will contribute to its success.
It is, however, essential to understand that venture capitalists only make deals that will act in their favor. They do not wish to wait for decades to earn returns on their investment. The likelihood of securing a venture capitalist funding is, therefore, dependent on the industry that your project is involved with.
Crowdfunding
There are various crowdfunding websites that you can use to raise funds for your project. While some of these sites put you in a pool of investors, others will allow you to raise money from anyone who believes in your project. All you need to do is promote your project strategically, and you will raise the required funds. You should utilize such platforms to take advantage of the available online resources.
Personal Savings
You can consider funding your project on your own. You may use the money saved up for significant investments or luxuries such as a house, a car, or a vacation to fund your dreams. This path is often considered risky because you will have no money to fall back to if the business fails to succeed. It is, however, advantageous in that you won’t have to give up a share of your company’s equity. Additionally, you get to keep all the profits, rather than sharing them with partners and investors.
How to Get Funding For a Project? Look for a Partner
As the old saying goes, “Two heads are better than one.” Getting a strategic partner is a positive move for your project. It is an essential part of the growth that will accelerate your business’s development process. One of the most significant advantages of a partnership is that you both have bank accounts. You can, therefore, combine savings to get your project on its feet.
Your partner will also help you to secure funding through the other methods listed above. Either of you is likely to obtain a personal or business loan from the bank. Though partnership means getting only half of the profits realized from your project, it is advantageous in terms of shared liability.