The Internet has irreversibly changed how businesses operate and people interact. So it should come as no surprise that the generation that grew with the Internet approaches their social and business interactions through Internet tools and technology. Over half of millennials have expressed a desire to start their own business, such as a hot dog franchise, yet because many carry exorbitant student debt, millennials have found inventive ways to finance their business.
Here are some of the interesting and unexpected ways some millennials are financing their hot dog franchise:
Finding a Grant
When it comes to financing anything, nothing beats the freedom that comes with grant money. This type of funding doesn’t have to be paid back and can go toward any aspect of launching a franchise. Of course, with such freedom come hurdles that include locating and landing the right grant for a given entrepreneur and entrepreneurial idea.
There are many grants designed to help minority business owners such as women, single parents, and more. Grants can come both from the government and from local trade associations. These grants frequently require extensive proposals.
Crowdfunding the Startup Cash
Traditionally, if they don’t have the funds themselves, entrepreneurs are expected to raise their first round of seed capital from their friends and family members. While this is still the path most of today’s entrepreneurs follow, many millennials have taken a new approach by reaching out to their social networks. Websites like Kickstarter and GoFundMe provide a platform for locating funds necessary for a startup or something like a hot dog franchise. On these sites, you can often offer rewards in exchange for support, and donors can donate as much, or as little, as they see fit.
While success stories tend to be for innovative ideas, millennials interested in opening something like a hot dog franchise can find success in crowdfunding their startup cash if they highlight a good backstory and really share their passion for becoming a business owner.
Attracting an Angel Investor
Angel investors are continually seeking out great leaders; often, they invest more in productive, capable people than in ideas. However, don’t be fooled into thinking the “angel” in the phrase means that these investors are willing to invest only out of the goodness of their hearts. In exchange for funding a significant portion of hot dog franchise startup costs, they will usually request a significant chunk of equity. But because there are huge benefits in receiving such money for financing, many millennials are happy to seek the financial assistance of an angel investor or two.
Going Online for Loans
If all else fails, millennials will seek out loans for their hot dog franchise. But instead of walking into a brick-and-mortar bank, these individuals more frequently go to an online lender. That’s because online lenders offer three significant advantages over traditional lenders:
- Faster applications. Shorter, streamlined applications are enticing to millennials.
- More approvals. Online lenders typically approve 60% of all applications, whereas big banks often approve only about 20% of small business loan applications.
- Record time to funding. Online lenders can typically have loans funded within just a few days, sometimes within hours.
For more information about any of these types of alternative funding or about starting your own hot dog franchise, contact us today and get started on your entrepreneurial dream tomorrow!