Once you have worked out the fundamentals of your business; the size of the venture, whether you’ll be hiring any staff, the size of any required premises and have written your business plan then you will have an accurate idea of how much funding you require in order to start your business.
Always consider that you may require more money than you have written down as a figure, in case of exceptional circumstances and as you’re likely to run at a loss at the beginning of your venture your borrowing requirements will be greater for a while.
When you first set up your own business you go into it with the understanding that you will have to spend at least some of your personal capital, and make an investment that could attract other investors to your business, helping to grow.
First stop should be people you can trust and who can trust you; speak to friends and family about potentially investing in your business. Even if you do come to an agreement with a friend or family member it is advised that you choose to sign a legal document agreeing the terms of the deal. This way you both know where you stand, what rights you have regarding the ownership and management of the company and the terms of any repayments.
It is much tougher these days to secure lending from high street banks and other traditional sources. You’ll struggle to find an institution willing to provide you with a large loan, overdraft or credit card, but there are still options for you.
Your bank will be able to provide you with all of the information you require regarding financial assistance and all options open to you. One of the most popular financial options within the current financial market is for individuals to remortgage their homes in order to start the business. This has become more difficult but whatever route you choose to go down, ensure you are fully aware of all the positive and negative eventualities relating to your choice.
Grants & Other Funding
There are grants and other sources available to small and start-up businesses from local authorities and agencies. Access to this type of loan can often depend on what type of business you are starting and which sector it is in.
Research your options thoroughly in your local area as there are agencies that can guide you in the right direction to find funding in grant form.
Options Moving Forward
With the difficulties associated with securing funding for a start up business, be prepared for the worst answer at every stage. Don’t become disheartened if you suffer rejection as there are many different options available for funding.
If you are unable to get funding from anywhere, think about if you really need that extra office space, equipment or members of staff. There are ways of cutting down your initial start-up costs and you could always employ external companies such as telephone answering services, virtual offices and a virtual pa to give you the best chance to have a professional outlook without it costing you the earth to have a permanent office of your own.
We have a range of articles related to helping start-up and small businesses. From business ideas to funding and how to market your business there is something to help you at each and every step on the business ladder.
Our Free Download section is also full of templates which will help you get started.