How to raise money for your business start up

by Phil Newton, founder, Sodaware.

The product development phase is a tough time, as little or no money will be coming into the business. It’s tempting to rush a product onto the virtual shelves, but there are better ways to raise some early money to keep you afloat. You can borrow money, apply for money from grants or investors, or set up your own streams of income that will earn you money whilst you concentrate on other things.

This article will outline each of these methods, and provide several ways of creating your own easy to manage income streams that will continuosly bring money into your business with very little time required.

Loans and Overdrafts

Loans and overdrafts are an easy way of raising some quick cash. They do have to be paid back, usually with a high-interest rate, which can cause problems further down the line if your business doesn’t become as profitable as predicted. If you’re a sole trader or partnership, you are also personally liable for the business’s unpaid debts, so think very carefully before borrowing money.

Friends and Relatives

Close friends and relatives may be willing to lend you money short-term, but as with banks you should be very careful. Unpaid debts between friends and family members can cause a lot of friction, especially if the “what’s a few hundred dollars between friends” mentality kicks in.


Grants are tougher to get hold of, and you may have to jump through a lot of hoops to get the money, but they don’t have to be paid back so are better in the long term. It’s not uncommon to have to write a report on how the money will be spent, and to provide a detailed project on how the money was spent and what differences it made. Grants are often given for specific purposes, such as buying equipment or research and development, but some can be more general.

There are far too many grants available to be listed here, but local councils and business organisations will have a list of the help that is available.


If you pitch your idea to a third party, they may be interested in putting up some capital in return for a percentage of the business. Again, this subject is far too complex to explain in a few paragraphs, but there is plenty of information available on the Internet.

Creating your own income streams

If you’re desperate for some quick cash, creating income streams is not the best option. Many of these methods take months to bring in any earnings, but over time they can add up to a considerable amount of income that can compliment your business earnings, and in some cases can even exceed money earned from product sales.

The first step is to get your website up and running. The faster you can do this, the better. Platforms such as WordPress and Etomite make it easy to get a site online without any web programming background. They’re also extendable, which makes it easier to add more advanced features later on.

Once your website platform is ready, start adding useful content. This term is used a lot, but what it really means is that your website should solve a visitor’s problem. Examples of useful content are book reviews, articles and tutorials. Look at your experiences and see what you can write about. The chances are you can come up with a long list of things that you know about that other people would find beneficial.

A blog is another way to create value, and it also helps to build trust between you and potential customers. There are plenty of subjects to write about, including: game reviews, tool reviews, tips on how to do things, critiques of existing games, development diaries and silly or unique game ideas.

Blogging is a good way of getting traffic and regular visitors, but it does require time and effort to make it truly valuable. If you’re confident that you can make it work, and you have plenty of things to write about, then go for it.

Once your website is online and it has some good content, you can start to think about monetising it. Here are just a few ways to make money online:

Text Link Ads

Text-Link-Ads are exactly that — simple text links that are placed on your website. They’re unobtrusive, can be customised freely and are very to set up. After signing up with TLA and adding your website, it’s a case of installing the script (or WordPress plugin) on your site and then they do the rest. There are certain traffic requirements to be accepted, and it’s useful to have a lot of incoming links from other sites, but once accepted very little maintenance is required as TLA handle the ad selling process.

Text links ads work particularly well in a blog setting, although they can still work on a conventional website. Recent improvements to the system include adverts in RSS feeds and adverts for individual pages. With a little bit of effort, it doesn’t take long to be earning a few hundred dollars a month just from this program. The whole system takes less than an hour to set up, and for that amount of time it’s well worth giving them a go.

Sign up at

Independent links

TLA has the advantage of being automated, low-maintenance and having a pool of willing advertisers. However, for a little bit more effort it’s simple enough to manage your own sponsorships. This doesn’t have to be limited to text links either, and can include banners and image based ads. This option is more suitable further down the line, but it’s still easy enough to manage.

Google Adsense

Good Adsense takes a long time to become truly profitable, and it’s not always beneficial to include adverts on your site. If you’re happy to have ads on your site, then it’s worth a shot. You can always choose to only display ads on certain pages, and there are plenty of different formats to choose from.

Google won’t pay out until you reach $100, which can take quite a while, but once the system is set up it’s very low-maintenance. To bring in any significant amount of money, your ad layouts will need optimising and you may have to blacklist low-paying sites.

Other Google Programmes

Google offers a number of other monetisation strategies, including referring visitors to their “Google Pack” programme and using their search engine on your site. If you have an established blog, using Google search can be another useful low-maintenance income stream.

chitika Mini-Malls

chitika mini-malls are another context-sensitive ad programme, but they are geared towards selling products from your website. If you’re writing about a product niche and have enough visitors, this can bring in a considerable amount of income over time that can compliment your direct sales and even exceed them.

Other Ad Networks

Yahoo and other large companies offer there own rivals to Google Adsense. There are also many smaller networks that work in different ways, such as Project Wonderful, AuctionAds and BlogAds. Not all of these networks are suitable for every site, but they’re worth checking out if AdSense isn’t your thing.

Amazon Affiliate Sales

Amazon affiliate sales take a long time to get going, and their rates aren’t particularly high.They take a little more effort than other methods, but if you’re writing about certain products it’s easy enough to include a few referral links. As your content and readership grows, more people are exposed to these links and eventually they start to bring in a decent amount of money.

Game Affiliate Sales

Most of the large game portals offer affiliate schemes for selling games. The rates can be quite good, and are usually around the 30% mark. They can be a good way of earning passive income whilst working on your own software, and it’s also good practice for writing copy that sells games.

Other Affiliate Sales

There are plenty of other affiliate services, such as ClickBank, that offer a huge amount of affiliate products you can sell. You don’t have to create a landing page or a full-blown site to sell these products, and sometimes just writing about a product and linking to it via a ClickBank link can earn a small amount of cash. There are hundreds of websites dedicated to helping people make money from affiliate programmes, and it’s a very competitive market.

Paid Reviews

Services such as “ReviewMe” and Pay2Post offer bloggers monetary rewards for writing about certain products. The rates aren’t particularly high at first, and paid reviews can be a turn-off for some readers.

Sign up at

Contract Work

If you’re looking to pick up small jobs to earn some money on the side, you can use a service like RentACoder to find work. It’s not really passive income, but a few hours a week on paid projects can help to keep your main business afloat. The main problem with these sites is the amount of people wanting huge systems writing for pocket change.


If you’re providing value to your readers, they may want to donate money to show that they care. More blogs and websites are starting to use donation buttons to raise money, but it’s not a particularly large earner. This method is more likely to be successful if you’re giving away lots of free stuff, such as tools and tutorials.

There are far too many ways to make money online that can be covered in a single article. When you’re getting started, every little helps. Although some of these methods will start bringing in money almost immediately, many of them take a lot of time and hard work to bring in larger sums of money. Most of them do not take long to get started, and can be left on autopilot whilst other, more pressing tasks are completed.

Optimising your earnings

Many of the previous income streams can be left alone once they’ve been set up, but to gain any real income from them you will need to optimise them for your audience. Optimisation can be a time consuming task, and many tweaks will only improve revenue by a small amount. However, over time these changes add up to something substantial.

A simple optimisation strategy is as follows:

  1. Measure performance — You can’t make any kind of informed change without knowing what is working and what isn’t. Carefully measure how each stream is working, and look at ways to improve each one. It may be something simple, like changing the placement of an advert or modifying the colour scheme.

  2. Make a change — Once you have decided on what to change, it’s time to take action. Stick to only making a few changes at a time so that it’s easier to keep track of. Let the trial run for at least a few weeks before making any permanent changes. If you’re experimenting with landing pages or sales pages, consider using a split test to compare results directly.

    In a split test, you assign a group to a visitor using a cookie or similar tracking device. This will then be used to decide what they will see. Split testing is a very useful technique that can help you test many combinations at the same time, and because they are being tested side by side it eliminates external events such as the time of year or traffic spikes.

  3. Analyse the results — Once your trial is over, spend some time looking over the results for clues on where the improvements were. This doesn’t just help with deciding which version to use, but it also gives you insight into what changes will work on other areas of your site. For example, if you find that adding a large image of a product to a review page doubles your Amazon affiliate purchases, you will be able to apply this change to all of your review pages and increase revenue across the board.

Optimising your results takes time, but the results are worth the effort. Just like developing software, creating profitable income streams takes time and is made of many small tweaks and improvements. The good news is that a lot of improvements, such as increasing traffic and getting more links will help your site throughout its lifespan.

Article by Phil Newton. Visit for Phil’s personal development blog, and check out the Sodaware developer blog.