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New ideas are continually emerging, but it is difficult to ensure these ideas are developed successfully. As a result, several ways have evolved to support the development of new products.

Privately-owned business

Many large companies started off as a privately-owned business. The owner makes decisions on the direction of the company and is not accountable to anyone else. There are benefits, including the ability to quickly adapt to changes in the market, but these companies often do not have the funding to invest in larger projects.

Crowdfunding

Traditionally, new businesses would borrow money from a bank to raise enough funds to develop a project. This is risky and, with interest payments, can be expensive. Crowdfunding uses websites to advertise products as investment opportunities, where people can choose to back a project with a financial donation if they think it will be viable. Backers are often rewarded with free gifts, discounts or a pre-agreed part of any profits if the product is successful.

Government funding

New businesses can benefit a country’s economy but may not have the full funding to start up. Government may financially support a new business if it is believed that it would benefit the economy. In the UK, this government backing is known as start-up loans.

Not-for-profit

If the owner of an organisation doesn’t cash-in the profit from the business but instead reinvests it into the business, it is known as a not-for-profit organisation. The profit is reinvested into the business to keep it running, develop the business or invest in new and emerging technology.