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5. Try Crowdfunding

A crowdfunding site like Kickstarter.com and GoFundMe can be an effective way to raise money for a relatively low cost. You'll set a goal for how the money you'd like to raise over a period of time, for example, $2,000 over 30 days. Your friends, family, and strangers then use the site to pledge money. Keep in mind, this isn't about long-term funding. It's supposed to facilitate the asking for and giving of support for ideas in the short-term. Usually, project-creators will offer incentives for pledging. For example, if you give a writer $20, you'll get a book in return. There's no long-term return on investment for supporters. Supporters don't even have the ability to write off donations for tax purposes. Regardless, that hasn't stopped close to 100,000 people from pledging to Kickstarter projects.

6. Attract an Angel Investor

Finding an angel investor can be challenging but can prove to be one of the most successful forms of financing your business. Of course, you have to be willing to part with some of the ownership of your business or the possibility that the investor may want to see returns on their investment in the form of royalties and expensive lines of credit which can be a drain on your cash flow later down the road. Below are some tips on how to handle the angel investor method:

• Add experience to your team: Seeing some gray hair and wrinkles on your management team can help ease investors' fears about your company. The veterans are likely to show your management's ability to deal with a tough economy. Even an unpaid, but highly experienced adviser could add to your credibility.
• Be a leader, not a follower: Did you start your company because you are truly passionate about your idea? Or did you just want to cash in on the latest trend? Angels can spot the difference a mile away and won't likely be interested in companies that stink of a get-rich-quick scheme.
• Know your stuff: Do your homework. This might be the most important thing angel investors will want to see. They are often busy people who want the facts laid out and for them without any additional research on their end. You'll need market assessments, competitive analysis, and solid marketing and sales plans. Even young companies need to demonstrate expert knowledge of the market they are about to enter as well as the discipline to follow through with their game plan.
• Be persistent: An angel may not be interested in your business right from the go. This is often the case if you don't have a track record as a successful entrepreneur. Staying in touch and updating the potential investor on big developments, like a major sale is a great way to keep an angel's interest if your business begins to prove it is a success.