8 Creative Strategies to Fund Business Expansion

Any entrepreneur who owns a startup or other small business might know how hard it can be not only to come up with funding — but to come up with fresh, new streams of income to power a business expansion.

If your creative tank is running low, there’s good news. We’ve got a lot of ideas. 

Without further ado, here are 10 ways businesses can generate funding and grow their operation.

Reaching Out to Friends and Family

To seek funding or not to seek funding, that is the question! Or at least, that’s what Hamlet might say were he launching a startup in this day and age.

Bootstrapping is typically thought of as funding primarily via your own personal finances. 

However, that’s not the only way to do it. 

Friends and family loans offer a casual approach to funding. These agreements typically don’t include equity, but instead feature a simple pay-back plan that often includes interest repayment for their trouble.

If you want to keep bootstrapping your business to maintain equity, this may be a great way to do it. 

Taking on Silent Partners

Of course, the disadvantage of bootstrapping is that, eventually, the well is going to run dry if you aren’t profitable yet.

For those who are OK with an equity exchange but still don’t like the idea of having an investor heavily involved, consider seeking a silent partner who doesn’t have any interest in participating in small decisions or day-to-day operations.

Capitalizing Software Development Costs

If you are looking into taking on funding, it may be time to see what you can do to make sure your business is as desirable as possible. 

For businesses in the software space, software development cost capitalization may improve the look of your balance sheet. This accounting strategy paints an accurate picture of profitability, and also positions development costs as assets. 

Crowdfunding

As of this writing, Kickstarter has raised nearly $8 billion and funded more than 250,000 projects.

In other words, the average project that’s gotten greenlit through that platform has been funded to the tune of $32,000.

While crowdfunding platforms might not always provide a ton of startup capital for businesses, they provide one more funding mechanism proven to work many times over. 

Domain Investing

Looking for alternative investments opportunities to generate a little income? What about building a domain portfolio? 

The best part about this strategy is you don’t have to have buckets of money to get into it. You can purchase defensive domain names, promotional names that you think future businesses would want to buy from you, domains based on upcoming events, domains related to geographic areas… If you get creative, the list goes on and on. 

Limiting Hiring

It’s admirable for businesses to want to create jobs as early as possible.

In this day and age though, founders can get a lot of what they need by doing the work themselves or using independent contractors on an as-needed basis, at least until cash flow supports bringing permanent workers on.

Forgoing Traditional Business Spaces

Up until recently, many businesses had to maintain a traditional office or storefront.

Of course, now, money can be diverted to expansion by saving on these spaces. Website builders make it easy to take your business online. And, you can use flexible coworking spaces if you do need to get together with your team from time to time.

Getting Realistic About Tax Deductions

Many businesses are eager to take every tax deduction imaginable. While it’s smart to write off necessary expenses, growing businesses should be careful about overspending just for the sake of logging a deduction.

The reason for this is that many smaller businesses with limited revenue might top out at low tax rates, regardless of what they’re spending. In addition, more complex bookkeeping and tax accounting will cost more if you hire it out to a professional. 

In other words, sometimes you need to spend money to make money. But, if you’re only doing it for tax reduction reasons, talk to a financial pro first to make darn sure that strategy is going to pay off.

Ready to Grow? 

From leveraging relationships with friends and family to capitalizing on emerging trends like domain investing and crowdfunding — the more diverse your financing strategies, the more entrepreneurs can navigate the challenges of scaling their businesses while maintaining control and stability.