Eight ways to secure capital for business

Weather we like or hate the fact that we require capital to start a business  we cannot do without it. Though it is challenging to acquire it sometimes, we cannot choose to dodge this difficult task of securing capital. 

It is simply because business cannot be started without capital. The world is thousands of years old. No one throughout history ever started a new business without capital. Lessons are drawn from experience. And human experience shows that capital is always used to start a business. 

Just as a student has to learn from his teacher, and considers the teachings of his teachers reliable. So do we have to learn about capital from business experts and consider their teachings on the matter reliable. They are authorities on the matter; having vast knowledge and experience on the affair. 

Experts as we know, have thought that capital is an intrinsic business startup requirement. Infact, foundational is it, the starter cannot do without it. 

If they simply stop at positing that assertion we may be right not to believe them. Every claim requires credence to be established. But if they go further and support the claim with credence we would support them. Every claim is made a fact by credence. Interestingly they have proven beyond doubt that capital cannot be substituted when it comes to business establishment. 

To illustrate it, to make clearer this very lesson, to prove it, let us consider someone who wants to start a photography business. He requires many things to bring his business to birth. 

Photographs are created with Cameras. So he needs a Camera. He needs an editor and printer for editing and printing photos he snaps his customers. He needs a computer for storage of the photos he snaps. He requires a space; a studio a place where his customers can contact him for his services. He would also have to obtain permits from the appropriate government agencies, to operate as a photographer in his country. 

Achieving all of those requires money. Cameras aren't free, they are acquired at a prize. Editing devices and printers are purchased with money. Computers are also monetized by the traders, thus one would pay money to obtain ownership of them. Office renting also requires money. So does obtaining permit. When the desiring person has money, he would purchase all of those and create a photography business. But without money, he cannot establish a photography business. This very illustration serves to prove that capital is required to start a business. Not just photography but every kind of business. 

Capital is defined as the original funds used to start a business, implying that business startup requires capital. Therefore every person desiring must start business with capital. 

Since it is a necessity it must be secured. The person desiring to start business must secure it to start a business. Every desiring person surely would want to secure capital. He wants his dream to be achieved; he wants to establish a business. Perhaps he cannot wait to start deriving the benefits that he intends to derive from his business. So he is infact eager to secure capital. 

He is then faced with the concern of how to secure it. He would want to know the ways through which he can secure it. He would want to know so that he could secure it through those methods. Interestingly capital is something that can be acquired. How? It is what we want to now discuss. We want to talk about the numerous ways through which people could acquire capital. Then we are learned on this, we would adopt any of the means to achieve our goal of securing capital, and fulfil our dream. And what satisfaction we would feel for achieving our dream! 

           1. PERSONAL SAVINGS 

Money comes into our hands every now and then. Sometimes we receive gifts of money. Sometimes we receive articles we can convert into money. If we are dependent on our parents or guardian they would usually give us money once in a while for our up-keep. 

By nature we do not just spend all of those monies. We save part of them. We save some of it so that in the future if we have any problem that money could solve we would use it to. We would surely have needs in the future which money could help us meet, making our choice a wise one.

The money remains in our purse except we use it. And we usually continue to pile it up. 

But then, for any reason at all, we may develop the desire to start a business. When this desire is developed within us, we never refrain until we start a business. 

Business is that problem, that very need which money could help us to meet. The reason we save money has still not escaped our memory. It can not. It is to use it to meet a need. Particularlu a very important one. Since business is such a need, we could use the money to start a business. Considering that business is a lucrative venture we would be particularly motivated to want to use it to start a business. We could realize the money through business. And even replace it. 

Consider an illustration. Jack's a student, receives monthly, money from his parents to help him buy whatever he needs in school. He saves part of the money in his bank account. After a long time, the money adds up to a huge amount. When he graduated he wanted to start a business. The business he wanted to start was photography. He needed to buy a Camera, editor, printer and computer. Acquiring all of those required money. He could not buy them without money. So, he used part of the savings to buy those items and started the business. 

We are not just presenting the possibility of using our savings to start business. There are evidences that men have used their savings as their business capital before, attesting to our claim as factual. 

                2.THROUGH LOAN

               A. ALIKO DANGOTE 

Aliko Dangote is a top figure in the field of business. There is no Nigerian more a business man than Dangote. His business is not only one of the oldest in the country but successful. 

The Dangote is can be described as a merge or conglomerate of many ventures; including cement, sugar, textiles etc. 

His business networth supercedes that of every business in the country. He occupies a position as the wealthiest person in Africa, thanks to his business, proving that it is a cash-cow to him. No other figure or business has more recognition than the Dangote. He is both the envy of his inferiors and the target of aspirants. 

He was born in Kano in 1959, which happened to be the place of his origin. He identifies as a Muslim and was introduced to it by his family whom were practicers. Dangote's grandfather was considered one of the richest persons in Kano, thanks to his business of trading agricultural products. 

When Dangote finished college he was 21 years old. He wanted to pursue business; trading on agricultural commodities; importing them into Nigeria and selling. Achieving this required capital. Dangote was faced with the concern of securing capital. He prioritized the securement of it. To achieve it, he decided to collect a loan; to borrow the money from his uncle and repay. He appealed to him, and he accepted, and loaned him $3000. With it, he established his business; bought and imported agricultural products into Nigeria and sold them. His story serves as a proof that capital could be acquired through loan. 

                  B. ORJI UZOR KALU 

Orji Uzor Kalu is one of the most successful business men in Nigeria. He is well known. He is very rich like most successful business men. His business venture is large and lucrative, having a big networth. Surely he is worth mentioning and discussing when we talk about business men in Nigeria. 

Orji Uzor Kalu's biography is well know. He is an Eastern. A Christian by practice. Orji conceived the idea to pursue business after he came out of college. To achieve this, like every person desiring he needed capital. To cut the story short, Orji secured his capital by getting a loan which he used to establish it. 

The examples of both Dangote and Orji Uzor Kalu, are good attestations to the claim that capital could be drawn through loan. 

What is consistent with most business men that we know is the securement of capital through loan. A bulk of the pages of history is dedicated to the writings of business characters. And very many of them secured their capital through loan. 

How can you define a loan? It can be defined as the money that is borrowed that would be repaid with interest. 

The fact that there is this provision, implies that one could secure capital through business. I mean, you want to start business and you do not have money.

You lack capital. But you are willing to bring into reality your dream. Since you lack money, you would look for alternative means to achieve your goal. Then, you learn that someone is willing to give you money. Not for free though. He attaches an interest to this money. He requires an interest for the loan. All you have to do is to accept his terms and he would give you the money, and you would use it to start business. 

You are optimistic that the business you want to start could succeed. You have seen many succeed at it. It is a lucrative one. You could realize much revenue and profit from this business. It is your judgement that after establishment you would realize enough to cover your capital. 

Nothing then holds you back from accepting the loan. Since the business is capable of giving you double the loan you would collect, you can be able to repay. You would surely accept the loan and pay. So, loan is one way to satisfying our appetite for capital. Since many have through this method, you can.

You can, by securing loan from a loaner, someone who specializes is giving loan to people. All those who collect loan, collects it either from a professional or someone that is willing to give. With it, you would establish a business. Then, when you do, you would repay the loan with the profit that you would realize. 

         3.THROUGH A SPONSOR

Business is a project. And every project has a sponsor. Therefore some could choose to sponsor a business establishment. For instance a father could sponsor the business of his child. 

When you go to someone for loan sometimes you must not indicate what you want to do with the loan. But some who are aware that you want to start a business may sponsor the establishment of a business with or without profit. Consider music for instance. Record labels offer the service of sponsoring the music production of artistes that sign with them. They would share the percentage of the profit with the artiste. Lots of people have had their projects sponsored by others. If you are just lucky you can find someone who would find your business plan appealing and be willing to sponsor your business formation. Such a person may be willing to share interests with you. Or he or she may not request for interest. A sponsor is almost the same as a loaner. The difference is just that some times the loaner may not receive a consistent percentage of the business interest. But the sponsor may continue to. It all depends on the agreement between the two parties.

               4. FROM PARTNERS 

The capital used in the formation of partnership could be sourced from those desiring to go into partnership. Usually each member contributes to the capital of the business. That is why the profit is sometimes shared in accordance with the capital each person contributed. 

Examples are there of Partnerships that was established by the monies contributed by each of the members, attesting to the claim that capital could be drawn from partners. 

To illustrate that this can be effective consider that ten people are willing to form a partnership, and all contribute money to the capital, the money they would realize would be very much. Each person would contribute. By the time they add it up, it would sum to a huge amount. Thus, it is a way of realizing capital. 

You can source money for business, from those whom you want to go into partnership with. You would have to make each and everyone contribute money. When each and every person desiring to forge a partnership contributes money, you would realize enough capital to establish the business with. 

Although the money realized would not belong to one person, it can be used to start a business, bringing into reality the dream of each and everyone to start and own a business.  

         5. FROM GOVERNMENT 

Governments sometimes encourage business formation, in order to enhance employment, reduce unemployment and increase source of revenue, and support the realization of the establishment of business by providing capital for individuals to start business. 

Sometimes they are willing to give grants. When they are not giving capital, they sometimes make deduction on taxes. But there would always be a time that they provide money for citizens to start business. This has happened in the past, and could now. 

You could draw capital from the government by qualifying for and applying to them for grants and money when they avail the opportunity to secure it. 

     6.FROM NETWORTH OR CAPITAL 

When you establish a business, you hope to achieve your objective, which is realization of profit. When turnover or patronage occurs, your dream comes to pass. You make sells and draw revenue.  

If you own the business along with others, you would not consume all of your profits. Everyone would receive a share of it. While a percentage of it would be saved in the business account. This very money out into the savings or account of the business is known as the networth of the business. 

The more profit is realized, the more you add to your networth. 

Then in the future if the business wants to start any business, or diversify, they could draw money from the account to do so.

An example is the Dangote. Dangote drew money from his networth or capital, to establish his ventures. 

If you own the business alone, you may choose to draw out money from the profits you realized to start a business. It simply involves using part of the money or profit you realized from a business to establish another.

Only if you already have an existing business that gives you profit, can you succeed in using it's profit to start a business. 

Think about Mark Zuckerberg for instance. His business has a networth of billions of dollars, which he drew from the revenue of the business. With the capital of the business, he could start another business.

Thus you can make the profit of your business the capital for another business. 

        7. THROUGH INHERITANCE 

One could bequeath the ownership of his wealth to anyone. For most people the person to inherit their wealth is a decision they would make. Traditionally most people bequeath it to those they are biologically related to. Sometimes friends are lucky to be successors of wealth. 

Donald Trump whom we all know inherited large sum of money from his father. According to some he even inherited some of his material wealth and business. 

If you put yourself in position or are lucky enough to secure money through inheritance, either from your parents or friend, you could use the money you inherited from them to start a business.

                8.THROUGH GIFT

We all receive gifts. Infact gifting is our nature. We give items to people and they do us. For some gifting is a a way of expressing appreciation. For some it is a way of expressing love. For others it is a way of demonstrating generosity. 

One of the things we may receive is money. Think about the last time you received money from someone? You may be fortunate to receive even a huge penny from someone. 

The person that would gift you money, will not mandate you to use it to do a particular thing. Once you receive a monetary gift, it becomes yours. You could do whatever you wish to with it. A man has the right to use whatever is his, to do whatever he wishes. 

You could use it to start a business. Draw capital for business from money you would receive as a gift. Qualify for the gift by putting yourself in a position where you would receive it from someone. If you are fortunate you could easily receive a gift. But you can beg for it, if you are not given it yet. Then when you get it, use it to start a business.