Financing a Web Start-Up

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Do you have an idea for the next great web-based business? If you think you do, you’re part of a large field of potential competitors.

You may be right; your idea may be poised to revolutionize e-commerce or social media. Then again, so might someone else’s idea. Unfortunately, if you’ve both started with a brilliant idea, the thing that’s going to determine which of you comes out on top is probably the financing that it takes to get the idea off the ground.

Expect High Costs

Many plunge into the business of running an internet-based company thinking their great idea will be primary and their costs minimal. Since you don’t necessarily have to invest in physical retail space or significant infrastructure, it seems like starting a business these days can be remarkably cheap. And though there’s definitely some truth to that, the start-up costs, even for a web-based business, are typically more than one person can handle.

Apart from the obvious initial investments in web hosting bandwidth and development, if your business is to get off the ground, you’ll likely have to pay for some kind of professional development, and you may need to bring in freelance workers with expertise in different areas of development, or search engine optimization, or sales. These sorts of professionals do not come cheap, but their contributions are worth the investment, as it might mean the difference between a business with a meteoric rise and one that languishes in the development stage.

A Range of Options

For some people, the thought of planning for extensive financing is contrary to why they want to launch a web-based business. Amidst the challenges posed by the recent economy, many frustrated workers have decided that going into business for themselves is their only way of making the best of a bad situation. Naturally, such people have limited means to invest in a new business, and many of them suffer under bad credit, as well.

If, however, you have property to back up a loan, you can seek out hard money lending to get you the capital you need to turn a great idea into a great reality. If you haven’t got that kind of collateral, however, you’re still not out of options.

If you’re certain that your web business is a worthwhile investment and will be capable of turning a profit relatively quickly, it’s often possible to find unsecured business lines of credit that will allow you to borrow against your later earnings in order to provide you with the fast cash to get your company racing off the ground.

Plan Ahead

There are options to get the financing you need. Be sure to explore them when starting a web-based business. As tempting as it may be to think that a solid idea, hard work and dedication will carry your start-up through its early stages, this is rarely the case, even in an age with abundant examples of apparent overnight success.

By all means, maintain a trim budget to whatever extent possible, but know your options for obtaining the financing you can’t handle out of pocket. You wouldn’t want that brilliant, revolutionary idea to end up going to waste.