How to fund your Wi-Fi project
Setting up a new business is always something exciting, being your own boss, developing personal ideas and expanding investments. While being an entrepreneur is an adventure that can lead you to success, it is also risky.
Indeed, the biggest challenge when setting up a new business is to fund this new activity. Although many sources of funds exist, all of them comprise risks and benefits. However, remember that the “magic solution” does not exist, as there is always a cost and a risk to take into consideration.
The self-funding or the “do it yourself” solution is when you invest your own money into the business. A lot of entrepreneurs opt for this solution to launch their business before resorting to more formal funding opportunities. If you are one hundred percent motivated, sure of your idea and failure is not an option, then you should be confident about investing your own money into your business.
Take into consideration that up front costs in the Wi-Fi industry are not too high: Tanaza allows you to work with low-cost access points. Check our business models for more information.
Moreover, cloud-based Wi-Fi management solutions allow you to work from wherever you are, a non-negligible point at a financial level. The self-funding also frees you from the bank (or other entity’s) loan interest rate and allows you to keep anr eye on profitability. The risk is, of course, to invest all your savings into this project without having a safety net to fall back on.
Moreover, if you are living in Europe, consider that the European commission is currently working on a project to develop Wi-Fi in European cities and that this could be a potential source of funds for your project. At a local scale, administrations like these are often interested into sponsoring startups that work towards the smart city transition.
If you need more information about how to create a profitable business in the Wi-Fi space, you can download our paper by clicking here.
Another solution to consider is crowdfunding. Crowdfunding allows you to collect money from people that you don’t know but who are interested in your project. The key for a good crowdfunding campaign is the reputation and the quality of the content you publish/promote. In fact, when using a crowdfunding platform, you are in some way selling your project to unknown people. The description of your project and your business strategy have to be clear and realistic. If this is done successfully, people will be willing to invest a bit of money into your activity. Otherwise, if the campaign does not succeed, this can have bad effects on your business’ reputation. Moreover, take into consideration that you need to reward your future financiers according to the sum they will invest into your project. Read this article from The Balance to know how to prepare your crowdfunding campaign.
To fund a Wi-Fi project on one of these platforms, describe concretely how you will deploy the Wi-Fi network and what will be the benefits of an internet access in this area or venue. You can also use one of the many articles that we have on our blog for ideas onthe benefits of offering Wi-Fi in different sectors.
There is also the solution of a traditional bank loan that consists of a bank lending you money with interest rate. Nowadays,a lot of banks try to help entrepreneurs in their project by offering low-interest rates. You receive an interest rate based on your savings and the investment needed. To receive the best interest rate, we advise that you contact different professionals.. Again, you need a strong business strategy as well as a business plan that will allow you to reimburse the funds and the interest to the bank on time.
Last but not least, the angel investors are people willing to invest money into your project but who expect huge returns on their investment, this is also known as “capital funding”. Take into consideration that you will have to share your profits and you may have to grant a part of the control over the business operations. Be sure that your new activity is lucrative enough to satisfy your angel investor in order to avoid any loss of ownership.
To conclude, there are many solutions to fund your new activity from investing all your savings to capital funding. Remember that if you live in Europe, European Commission approved a budget of 120 Million euros to finance Wi-Fi infrastructures in more than 8.000 European cities.