Your financing mix can consist of internal income and external financing sources.
The So You Need Platform focuses on external financing sources.
Internal income is the money you make from the sales of your products or intellectual property rights,(e.g. works of art, books merchandising, music or film rights, ...) from organising activities (e.g. ticket sales, membership fees,...) or from renting out (e.g. rent from rooms or facilities in building that you or your organisation own).
External financing sources come from different financing spheres, such as:
Market sphere, Social and informal sphere, Government sphere, Hybrid sphere
Market sphere:
here the market relations and business contracts play a central role. In this sphere, we find, for example, bank loans and equity finance. Financiers expect a financial return on investment in line with the financial risks that they take.
Social and informal sphere:
in this sphere, financiers provide finance on the basis of a personal belief in a project's "good cause" and individual commitment, rather than contractual commercial terms or grant applications. Here we find, for examples, donation, patronage, volunteer work, etc. Financiers expect a social return rather than a financial return on their investment.
Government sphere:
policy makers or government agencies manage public funding, and distribute them on the basis of grant applications and in line with the strategic priorities of that government.
Hybrid sphere:
finally, there is a grey intermediate financing where financiers expect both a social and a financial return on their investment. For instance, impact investing and venture philanthropy belong to this sphere.
What external financing sources go into your financing mix?
In order for you to determine the right combination of external financing sources in your financing mix, it is important to consider the following questions, corresponding to the main filters on the So You Need Money Platform:
THE ANSWERS TO THESE QUESTIONS WILL DETERMINE the EXTERNAL FINANCIAL SOURCES IN YOUR FINANCING MIX
Why do you need money?
Choose one or more financing needs and the platform will guide you to the external financing sources that can answer those needs.
Different financing needs require a mix of different external financing sources. So: reflecting on and understanding why you need money is the first step in determining what a good combination of external financing sources in your financing mix can be.
Here are the different financing needs you might have:
Finance my structural operations
You are looking for opportunities to finance all costs that you incur hrough your normal business operations, such as paying rent, wages, inventory costs, insurance,…. These structural costs are essential to keep your work going in the longer run.
To realise a project
you are looking for opportunities to finance a specific temporary cultural or creative project, e.g. a to engage with a community, to prepare a performance, etc.
To bridge a period when I have to wait for money
You are looking for opportunities to ge financing to bridge the period that you have to wait for money that you have already obtained (e.g. grants).
To research and develop new ideas
you are looking for opportunities to investigate, develop or test a new product, process or idea, including new ideas dealing with digital and new technologies.
To make a long-term investment
You are looking for opportunities to make an investment for a long-term benefit e.g. buying equipment or a building, renovating a space, digitalising your work (activities), internationalising your work, investments to bring your work to new audiences or to develop your business further.
For mobility purposes
You are looking for opportunities to tour, network, get trained, access foreign markets, etc. in a country other than the one where you are based.
To develop skills
You are looking for opportunities to develop your skills or the skills within your organisation. These can be digital, financial, entrepreneurial, artistic, or other types of skills necessary for your job or that of your organisation.
WHO ARE YOU? What is your legal structure?
Choose your legal structure and the platform will guide you to the external financing sources accessible for you.
Your legal structure is a crucial element to consider when looking for external financing. Although this is not the place to provide advice on which is the best legal structure for you or your business, you should keep in mind that legal structures can influence your access to the various financial sources.
A self-employed person
As a self-employed, you carry on a business as a sole proprietor. This includes working for yourself as a business owner (without employees) or as a freelancer.
A for-profit organisation
As a for-profit organisation, you aim to generate profit via your operations. The specific legal status of your organisation depends on the law of your country.
A non-profit organisation
As a non-profit organisation, you do not work for the purpose of generating profit (although you operate as a business) and you fully reinvest the profits generated within your organisation. The specific legal status of your organisation (e.g. associations, charities, foundations, social enterprise, etc) depends on the law of your country.
WHAT IS YOUR LIFECYCLE PHASE?
Choose your lifecycle phase and the platform will guide you to the external financing sources that are most suitable for you.
As you are preparing to apply for funding, it is important to be reflective of the stage of development that you or your organisation is in. The financing needs and difficulties in accessing finance vary significantly at different stages of your development cycle. For example, as a pre-starter, you might have an idea requiring funding for the development of a prototype product you want to bring to the market. However, at this stage of your development, it might be more beneficial to seek business guidance and advice, rather than financial support. One way to frame your thinking is through the lifecycle framework. The three stages in an organisational or entrepreneurial lifecycle are shown here:
Vision or start-up
You have an idea for a new business or you are in start-up phase and you are still working on developing the model for your business.
A growing business
Your focus is on continuing to grow your activities and business.
An established business
You have an established business, a proven model and run successful activities - no matter the size of your organisation.
WHER ARE YOU BASED?
Choose the country(ies) you live in, and the platform will guide you to the external financing sources that are accessible in your country.
This is the final step in determining the external financing sources in your financing mix.
Your financing mix
The answers you just provided will create your financing mix
