Starting a business

How to raise money to start a business (and build it)

If you are planning to start a summer camp or after school program, funding is typically a top priority. Getting the capital you need for the materials, space, staff, and more is necessary to successfully get your business off the ground. But, even if you have been running your business for some time, you might feel the need to raise additional funds. Businesses often fundraise to get a bigger space, hire more instructors, spend time on marketing, upgrade classroom materials, or for another reason.

At Sawyer, our goal is to help children’s activity providers run and grow their businesses with ease so they can spend more time teaching. Raising money and increasing revenue are extremely important to the success of a business. In this article, we will outline what you need to apply for small business loans and grants as well as other ways to raise money for your business.

How to raise money to start a business

How to apply for a small business loan

Small business loans are a great option for children’s activity providers who are looking to start out. The US Small Business Administration (SBA) has a ton of resources that can help you find the right loan for your business, including a feature where you can search by zip code. However, SBA-backed loans might not be the right fit for your business because there are a lot of requirements. See below to learn how to apply for a small business loan.

Follow these steps to apply for a small business loan

  • Decide on the right type of small business loan
  • ~SBA-backed loans. These are generally as competitive as non-guaranteed loans, but safer and more stable. They even sometimes come with continued support as well as unique benefits like lower down payments, no collateral needed, and flexible overhead requirements. Unfortunately, new businesses are not typically a fit because SBA-backed loans require at least 2 years in business, strong annual revenue, and good credit.
  • ~Private lenders. New businesses looking to apply for a small business loan can shop around online and with private lenders or banks and then choose the one that offers the lowest interest rate.
  • Organize your application materials
  • ~Be careful. Make sure you read the instructions carefully because every lender has the potential to ask for different items. However, most small business applications will require some type of the following elements.
  • ~General information about your business like the name, address, and tax ID as well as more specific details like a business plan, budget, and even potentially business goals (especially based around what you will be doing with the money).
  • ~Financial information such as annual revenue (profit and loss statements), tax returns, and bank statements. If you are applying for this loan to start your business and therefore do not have annual revenue and other statements like that, they will likely ask for your personal financial information with your application.
  • ~Personal information about the business owners including names, addresses, Social Security numbers.
  • ~Information about your collateral, which is sometimes required by specific lenders. Collateral can be real estate, equipment, or some other type of capital.
  • ~A signed personal guarantee, which is an agreement that explains you are responsible for paying back the loan. 
  • Review your application with an expert
  • ~Before submitting your small business loan application, you might want to review your materials with a Small Business Development Center (SBDC) to make sure it is as strong as possible. Even if you are not applying for a SBA-backed loan, you can use the SBDC finder on the SBA website.
  • Send in your application and keep an eye out
  • ~When you send in your small business loan application, make sure you read through all of the instructions and follow up information. Keep your eyes peeled for additional communications either by email, mail, or phone so that you can get everything you need to the lender so you are successful.
Photo of how to apply for a small business loan

 How to apply for a small business grant

Besides small business loans, you can also look into applying for a small business grant, which can help cover some of the capital needed to get off the ground. Loans and grants are not exclusive, so you can apply for both and use what you receive to help you with each step of the process.

Follow these steps to apply for a small business grant

  • Decide on the right type of small business grant
  • ~Just like loans, there are a few different types of small business grants that you can choose from. There are 2 main types of grants for small business owners: government, which includes federal and state, and private, which can come from corporations or foundations.
  • ~Government grants. You can search for government grants on grants.gov and narrow down the options by filtering for small business grants as well as any other eligibility criteria you might fall under (such as woman-owned, LGBTQIA+, etc).
  • ~Private grants. With private grants, the competition is generally fairly strong, but they are also worth checking out. We recommend trying to find a grant that fits your company’s mission. There are also minority-focused grants as well as general small business grants from corporations that you can explore, too.
  • Fill out your grant application
  • ~Read carefully. While most grants have a standard application, it is very important to read the application and instructions as carefully as possible because you only get one chance. In most cases, these are the items you will need for your small business grant application.
  • ~A cover letter that tells the story of your business and mission and why you need the funding to help you accomplish your goals. Check out our full guide on writing a strong cover letter for grant proposals to help you kick off your cover letter.
  • ~Table of contents, which helps the reader understand what to expect in your grant proposal.
  • ~An executive summary, which acts as an overview of your entire proposal. Use our guide on how to write an executive summary for grant proposals so that you can write the strongest executive summary possible.
  • ~Statement of need (also known as a problem statement), which explains what you are looking for from the organization.
  • ~A project description, which further outlines what you will be using the money to accomplish.
  • ~Goals and objectives for your business.
  • ~Methods, timelines, and other project management related plans.
  • ~Staffing information, if applicable.
  • Personalize as much as you can
  • ~When you write your grant proposal, personalization is key. Do not just find & replace the agency or company’s name in your application. Instead, research the organization and include information about their mission, values, and former grant winners. Likewise, it is important to personalize based on how your company matches with their goals so that they feel like you are a good fit for the grant.
  • Send in your grant application and keep an eye out
  • ~Like the small business loans, we recommend double and triple checking your application before sending it in. Once you have submitted your grant proposal, stay on the lookout for further communication from the agency or organization.

For even more information, check out our full guide on how to get a small business grant.

Photo of how to apply for a small business grant

How to raise money for a business

Small business loans and grants are not just for new businesses. If you have been running your children’s activity business for some time, you can still apply for grants and loans to help you raise money for a bigger space, more staff members, different types of projects, or something else entirely. 

However, if you are looking for more ideas on how to raise money for a business, here are some of our favorites from the children’s activity providers that use Sawyer.

  • Crowdfunding. Create a GoFundMe or utilize another crowdfunding tool to raise money from your community members. You can offer events, private classes, special gifts, and other items as rewards for different sized donations. If you already have a strong presence in your community, crowdfunding is a great option!
  • Host an event. Events, like block parties, small concerts, or even birthday parties can help your business grow revenue more quickly. While they do require a lot of work and planning, you can increase your revenue a great deal in one day.
  • Offer gift cards. You can raise money for your business by offering gift cards for customers to purchase. Gift cards help because you receive the income upfront and you do not have capacity constraints.
  • List big-ticket items early. If you are a children’s activity business, you should be listing your camps as early as October or November. You can even include a nominal early bird discount to encourage early purchases. The goal is to get the income from your camps during financially softer months so that you can put that money to use when you need it. Read more about camp planning on our blog.

Looking for more advice on how to create irresistible offers to increase your revenue? Check out our guide with information to help you create a Black Friday marketing strategy so you can finish the fiscal year off strong.

We hope that this guide has provided inspiration for you to help you raise money either to start or build your children’s activity business. If you are looking for additional guidance on managing and running your business, the team at Sawyer is here to help. Use our resources for support as well.

With our suite of tools, like custom forms to record allergies and t-shirt sizes, flexible payment options like gift cards and installment plans, and seamless scheduling and registration on any device, Sawyer saves business owners 28 hours per month. If you are ready to spend less time on admin and more time doing more of what you love, see how Sawyer can help with a free trial or demo.

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