Startups in a nascent stage always find themselves struggling for sufficient capital or money. It is the bloodline of every business idea because without capital you just cannot hold the ground in this immensely competitive market.
In this era of digitization, digital marketing startups are making it big in the game. However, a lack of funding is the primary reason behind the failure of numerous such agencies. But do not be disheartened yet for there are a number of ways in which you can generate funds and ensure constant cash flow for your digital marketing agency! Before we dive into the strategies through which you can fund your digital marketing agency, you need to understand the foremost requirement of a successful digital marketing startup – a thorough knowledge and expertise in your domain.
Today, there are numerous digital marketing agencies fighting for survival. There’s a tremendous cut-throat competition to be the best of the best and collect some funding along the way. If you’re looking to start your digital marketing agency and looking for ways to get funded, you’re in the right place!
However, before we move to that, it’s extremely important to point out that to be at a higher chance of getting funded, you need to build credibility – both yours and your company’s. By building your credibility, we essentially mean enrolling yourself in one of the many digital marketing certifications and courses that’ll place you far ahead of your competitors in the fight for funds.
Now, let’s have a look at the ways you can raise funds for your digital marketing agency!
Bootstrap Your Agency
Bootstrapping or self-funding is a great way to finance your digital startup. Getting investors to fund your startup in the initial period can be quite challenging, and hence, self-funding will allow your business to gain traction in the market gradually. Either dive into your savings or seek help from your near and dear ones. Bootstrapping has its own advantages:
- You don’t have to give up equity of your firm.
- You won’t have to share the profits you make with any investor.
- You don’t have to pay any interest.
You can also take a loan from your family and friends. Being your well-wishers, they’ll surely step up to help you.
A recent development, crowdfunding has become an extremely popular method of funding startups. There are many crowdfunding platforms to help you, and Kickstarter, AngelList, CircleUp, CrowdFunder, and Fundable are just to name a few. All such platforms work in two ways, that is, either they allow you to raise money from anyone, or they pitch you within a pool of investors. As you specify your business goals, your funding needs, and the reason why you need the money, people on these platforms make online pledges to your firm either by promising to pre-buy the product or by offering donations.
Bring In The Angel Investors
By angel investors, we mean those individuals who are genuinely interested in investing in budding and promising startups. Angel investors can either be an individual unit or in a group who collectively invest in a business. Although angel investors take a considerable share of the equity of your startup, they often take on the role of a mentor and guide you through the challenging times.
Seek Out Venture Capitalists
Venture capitalists (VCs) are the big players in the game. They invest in the early stages of the companies that have immense potential. In exchange, they demand a certain percentage of the equity share of the company. VCs not only provide funding to your company but much like angel investors, they offer guidance and expertise and help you evaluate your business. However, since VCs are always interested in making quick profits, venture capital is more suitable for companies that are beyond the startup phase.
Collaborate With A Partner
Having a partner on whom you can rely and trust can be extremely beneficial for your firm. When two people come in to create something, the resources double up, which means more funds. Besides, when you have a trusted partner, you come up with more innovative ideas together.
Almost 80% of enterprises attribute their success to strategic partnerships.
Resort To Incubators And Accelerators
Incubator and Accelerator programs are another excellent funding option for startups in their early stages. Almost all major cities in the country hold these programs that usually run for 4-6 months. While incubators help nurture a business by providing training, network connections, and defense tools, accelerators aid the business in taking a huge leap to move forward. Amity Innovation Incubator, AngelPrime, Villgro, and TLabs are some of the popular incubators in India.
Entrepreneurs often rely on banks to acquire the requisite funds for their businesses. A bank usually has two kinds of financing options: working capital loan and funding. A working capital loan is a loan offered to fund an entire cycle of revenue-generating operations of a firm. Funding, on the other hand, requires an evaluation of the business plans of the startup, only after which the loan is sanctioned. In India, a majority of banks have various programs through which they provide SME finance to startups and firms.
Loans From NBFCs
In case you aren’t able to get a bank loan, fret not. There’s one more option – NBFCs. Non-Banking Financial Corporations or NBFCs are institutions that offer banking services without getting into the legal requirements like that of in a bank. Apart from this, microfinance is also an ideal option for small-scale loans.
With so many ways to finance your digital marketing agency, there should hardly be anything that can stop you from dominating the market, provided you have that solid business plan ready at hand!