The world of business has never been static. While many regular consumers may feel that business hasn’t changed very much, nothing could be further from the truth. Of course, from the outside looking in, it’s understandable that some would feel that things are working the same now as they always have been. You get an idea, some rich person likes the idea, gives you a bunch of money, people buy your product, and boom. Success. Sure, people may sell things on the Internet more often these days, but has much else really changed that much?
Those more invested or directly involved in business know otherwise. In the past few years, everything has changed. Some of the changes have been massive. Some of them have been more subtle. Every part of the process of building a business from the ground up is changing.
Today, we’re going to look at how things have changed when it comes to acquiring capital.
We’re turning away from the banks
The most traditional lending institution out there is the bank. And it’s true that most businesses do seem to turn to a bank when they’re in need of capital. But those numbers are dwindling as people are looking into alternatives.
This could be found in crowdfunding, which we’re going to look at later. For the most part, however, startups and small businesses are more likely to try finding a marketplace lender. Banks have started getting a bit less generous with small businesses. But independent lenders seem to have these businesses covered.
We’re going straight to the end consumers
One of the most fundamental changes here is found in the rise of online crowdfunding. Businesses used to have a more traditional and “linear” way of doing things. The aforementioned rich people would give startups money to help fund the realization of their ideas. Once that idea was brought to life, people would start buying it as a product. These people are the “end consumers”, the people who buy the product at the end.
But over the last few years, more startups have turned directly to ordinary people to gauge interest and raise the necessary funds. Instead of having a bunch of bigwigs tell them what consumers want, startups are showing their ideas to the consumers themselves.
We’re getting mobile phones involved in the process
We seem to be doing everything on the go these days, right? It’s certainly true that mobile phones are now ubiquitous. And there seems to be a mobile app for pretty much any process. But managing the process of acquiring capital is surely too ‘serious’ to be handled by a mobile app. Right?
Nope. We even have apps for handling lending and capital these days. This is certainly something that is in its very early stages at the moment. But there’s no doubt that this is a strong sign that many small businesses are going to find the entire process a lot easier in the future. Of course, the downside is that a near-perfect credit score is required in order to use such things to their fullest potential. I guess there are some things that don’t change!
[post contributed for tamarhela.com]