You know that you will need funds to get your Juicing business up and running. You may have Certified Juice Therapist’s qualifications, but you still need to get the cash to establish your dream business.
For people focused on helping others in their health and wellness journey, sourcing funding for a business startup isn’t a strength we have had the opportunity to develop. In truth, the whole process can feel overwhelming – not knowing where to start.
You can go through many avenues to get startup funding, and you don’t have to choose just one route. Accessing funds from multiple sources is possible if you are organized and prepared to do the leg work.
One funding source isn’t better than any other. Your decision will have a lot to do with your risk tolerance and the different contingencies you have in place. Read on to find out some of your funding sources and how they might help.
Raising Money for Your Juicing Business
This type of funding is where you invest your savings into the startup. Not everyone can do this, but remember, you don’t have to throw all of it in. You can do a partial self-fund if that is what is needed to start up your Juicing Bar.
The best part of self-funding is that you’re not required to give away any equity in the self-funded part and don’t have any loan repayments. It’s risky to put all your savings into a startup, particularly if you don’t have any experience.
This funding option is the heaviest relied upon choice up until recently – the landscape is changing! It involves accessing business loans, credit cards, or lines of credit to fund your juice business startup.
You will need to show a good credit score, have your tax returns in order, and an exceptionally well thought out business plan. The banks will also require collateral. This will usually be a house or property that you own.
The best part of a business loan is you won’t be required to hand over any business or brand equity. But, in the current climate, it is sometimes hard to access these loans. Also, the interest repayments mean you are eating away at your profit every month.
This funding source is where investors use professionally managed funds to invest in companies they see as potential successes. It isn’t easy to access this type of funding as a startup because they prefer more established companies already experiencing a positive financial outcome. But it’s not impossible.
This funding differs from traditional financing because it offers ownership of the business rather than repaying a loan with interest. Utilizing managed funds can have you raise the full amount of funds in one hit. However, it does mean the fund can have a big say in your operations, limiting your decision-making.
A high net worth individual with surplus cash, ready to invest, are referred to as angel investors. They can work alone or within a network of multiple angel investors.
Angel investors helped fund a few of the most successful startups globally, such as Google and Alibaba. These angel investors often give business advice and are available for mentorship. But there is a cost. They usually demand up to 49% equity in the company.
This type of program is found in every major city. They are designed to accelerate your business by nurturing it through access to tools, training, and networking opportunities. They often fast track your business from concept to opening within 4-8 months. Hence the name accelerator program.
The best part of these programs is having access to mentors, business advisors, tools, and other experts, including angel investors and venture capitalist funds. These programs are very selective and extremely competitive.
Crowdfunding offers a highly creative way to gather funds needed for startups. You can almost describe it as taking contributions, pre-orders, or guaranteed discounted prices when the product comes online. Essentially, in the juice business, you will be preselling at a small discount.
As the entrepreneur, you describe the business on your selected platform, indicating its goals, plans for profits, what funding amount is needed, and how the funds will be used. People choose to either make a donation or, more commonly, pre-purchase the product at a discounted rate.
It’s not a way you can raise vast amounts of money, but you do have creative freedom, and you can generate a community of potential customers before your business opens.
This funding is commonly referred to as seed investment. It’s where you access non-banking financial institutions because your traditional banking options are limited. This may be due to having a poor credit rating. It also may be due to having little or no collateral. Potentially you would be able to raise enough money for a complete startup, but you would have to do it over multiple sources. This can become complex.
Small Business Grants
Business grants are monetary funds given to a business by an organization (usually the government but not always) for a precise purpose. Startups commonly use them. These grants don’t need to be repaid. The catch is they come with restrictions. The money needs to be spent in the exact way outlined by the provider of the grant.
There are specialized programs for minority or disadvantaged groups in every state that you may access. Each state differs, but some include woman’s business grants and even veterans grants.
Establishing Relationships with Investors
Communication is an essential part of your relationship with your investors. Strong, clear, and concise communication is needed when you craft the funding agreement and full transparency in your relationship as it unfolds throughout your business journey together. It’s best to have fewer investors to decrease communication problems and be able to maintain relationships.
Also, consider your equity agreements. The investors will get a minimum of 40% in your contract. A lot of investors will ask for more. You should never go over 49% of equity; otherwise, you lose control of your brand and business.
How do you find Investors for your Juice Bar?
It would help if you talked to multiple experts in the area. Consider talking to entrepreneurs who have acquired loans or investments and what worked and didn’t work for them. They may be able to introduce you to their network.
Attend local business meet-ups and speak with the other members. They may be able to point you in the right direction of local funding sources or bank managers that are willing to hear your pitch.
To save your time and energy, consider pitching to several investors at once, rather than setting up single meetings. Pitch to 15 potential investors but only have spots for 5-8 investors. This creates a sense of urgency and action within the group.
Set up a tasting experience for local investment groups or individuals. It’s another excellent way of creating excitement around your startup.
Know what your investors are looking for. If it is purely financial gain, pitch that angle. If it’s a local philanthropic investor, speak about the potential for community enhancement.
Always think of the potential questions you will be asked by people who want to protect their money. The truth is – they are looking to put their money to work. You are essentially helping them make more money. Always answer any concerns before they are voiced. This is where your SWOT analysis will come in handy when you did your business plan.
The most important point – be professional. No-one wants to invest money in someone who is disorganized, untidy, and sloppy. People invest in people. Present yourself as someone who can run a juicing bar business and be able to do it well.