As a skincare entrepreneur, having the right products is just the start of your journey. In order to get your company off the ground, you need access to capital. Today, we’ll be talking about three financing ideas that will help your business take off. Let’s get started!
For most business owners, the first round of capital comes from their own pockets. Funding your own venture is an excellent idea if you’re starting small in the skincare business and if you’ll be going through the private labeling route.
While funding your own business may have its risks, it’s still a feasible option. You have total control over your business since it’s your own money to begin with. Furthermore, you can attract investors more easily down the line if you finance your own business from the get-go because it signals that you believe in your company’s vision.
Friends and Family Financing
Did you know that 5% of US adults have invested in a company started by someone they know? Asking for capital from your friends and family is a viable option that rests on the amicable relationships you have.
When choosing family and friends to ask capital from, you need to make sure that they have faith in your potential to succeed, they understand your plans and the direction your business will take, and that they know the risks the investing in your business entails.
Be realistic about how much money you need and make sure to agree on what form the funding will take. This could be a loan or equity in your company.
Get Help from Venture Capitalists
Venture capitalists are investors who typically go for more mature businesses. They also want a say in the daily operations of a business. They often require scalable cash-flow and positive companies with proven products and business.
To get their attention, you need to have a great pitch which includes:
- Explaining what’s changed. Detail the innovation, industry shift, or problem that presents a substantial opportunity for your company.
- Explaining what you do. In one sentence, show how your company can capitalize on this opportunity.
- Explaining the facts. Get to your company’s story and financials quickly. Layout the opportunity with numbers. Discuss the team and their abilities and experience.