When you are looking into expanding your business digitally, you must first find out how to fund the expansion. Building applications is a large financial commitment. While the returns may be promising, you have to have the capital to get the process started.
Applications vary in cost. While the average cost for a simple application is around $100,000, more complex applications cost around $230,000. These are large costs and we wanted to grow through some options on how you can fund your digital expansion.
Using your personal savings is one of the most convenient options. You aren’t tied to anyone else, and it is a quick way to jumpstart your business. It is desirable because you have full control over the business and financing. Additionally, using your personal savings leaves feelings of self accomplishment and satisfaction.
However, there are some cons to using personal savings. When you choose to use your savings, you are solely reliant on yourself. Oftentimes with investors, you get advice and guidance. When you choose personal savings, you forgo the expertise that others can bring to the business.
Family and Friends
If you have family and friends that have an entrepreneurial desire, this option could be for you. This option allows you to obtain funding, and fast. While they may be able to support you in a large capacity, this type of financing should only be used to start the business. This should be the stepping stone to looking for other financing options (Grants, investments, etc).
While this option is speedy and efficient, it does lack in some capacities. When you accept money from friends and family, you are placing a new stress on the relationship. Since you are indebted to them, your relationship dynamics change. Additionally, very rarely are your family and friends able to give applicable business advice.
Bank loans are the most conventional form of financing for your business. These are popular among startups because they are the most well known. With that said, you are required to do your research and become well informed about the different options. Each option has different interests and rates and should be known before agreeing to anything.
The bank loan allows you to retain full control over your business. WIth that said, bank loans require a lot of paperwork which can be time consuming. However, it must also be understood that when you get a bank loan, you will be required to pay back the loan regardless of how your business performs
At the end of the day, you need to do your research. Some funding options are better for you than others. Build a business plan so you can be better informed when making a decision.
Here at Vog, we believe in transparent pricing. Once we fully understand the project and finish scoping, you will know what investment is required. We are excited to be a part of Texas app development. If you want to know more about Vog, reach out to us.