How the Internet Has Changed Small Business Funding

Funding

Once upon a time, a person with business plans would need to approach a local lord or lady in order to procure the funds needed to get things started. Years later, following the dawn of the Industrial Revolution, those with business aspirations typically sought out wealthy capitalists in order to encourage local investment. Fast-forward a few centuries and we’ll meet the latest paradigm shift in business and professional funding: the internet.

Where once you had access to only a few local sources of investment money, the internet connects you with hundreds of millions of potential investors. Paltry sums and simple ideas have the ability to grow exponentially under such circumstances, potentially turning your clever idea or promising business plan into that next big thing.

Obviously, this is an opportunity that small businesses looking for funding can’t pass up on! Time are changing, the business game is evolving, and the web is at the forefront of it all. Here are four ways that the internet has changed small business funding:

Vastly Expanded Reach

The most obvious benefit of the internet when it comes to drawing funding is the vastly expanded reach that all small business owners enjoy.

Where only 20 years ago a person would need to hit the phones and the street in order to draw the interest of hundreds of potential investors, the internet makes it easy to connect with thousands, or even millions, of the same, but with much less effort.

Taking advantage of this in your hunt for investment cash requires only that you showcase what you’re offering to everyone, everywhere that it matters!

More Market Opportunities

Small Business

Once initial funding has been secured for your small business, it’s time to get selling, and this is another area in which the internet has completely changed the game. Even the most localized of small businesses is now able to break into regional markets that simply wouldn’t be possible without our worldwide internet, exponentially increasing their chances of penetrating the necessary customer bases and allowing them to make good use of their initial funding.

On the other hand, because this same truth applies to all small businesses, you can be sure that your competition is no less internet savvy, requiring you to push your products as far and as wide as you possibly can, no matter what you have for sale.

More Risk

While Internet has made it easier to research funding options and discover Funding Organizations, the risk has got higher as well. It may be a huge boon to business, but the internet also presents much more risk for small businesses than any other tool, opening glittering avenues of gold that lead only to bankruptcy. Just as consumers have much more choice when it comes to spending their hard-earned dollars, small business owners have many more places to spend their investment capital, potentially putting you into the red before you know it.

The trick to minimizing the risk that the internet’s reach presents is to simply be frugal, especially during the early stages of deploying your business. Overhead is a potential killer during economic slowdowns, making every dollar count in the moment, more so than you can ever predict.

Crowdsourcing

Kickstarter

Perhaps the most in-your-face of the internet’s effects on business funding is the relatively new concept of crowdsourcing; that is, obtaining micro-investments from a variety of interested parties. Best exemplified by massive crowdsourcing website Kickstarter, the concept is helping to launch thousands of small businesses who would otherwise never have been able to raise the necessary capital. This has helped many innovative products and ideas get a chance to shine in a business landscape dominated by huge, smothering conglomerates that often otherwise leave no room for small competition.

Kickstarter may be the best-known example, but it’s not nearly the only crowdsourcing website out there. A few minutes on Google will quickly reveal that this trend is a rapidly growing one, promising to utilize the digital connection we all share in order to help empower the little guy and girl, returning the very concept of capitalism to its humble roots.

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