You have a fantastic idea for a business startup, but there’s only one thing stopping you – funds (or lack of them – to be more exact!). A lack of funding is a huge obstacle to overcome and is not without risk, however with a little planning you could soon be launching your new business and watching the profits roll in! Read on for tips on how to secure funding for your business start-up.
Develop a good business plan
The purpose of a business plan is to forecast the growth of your business based on projected sales. It may be worth asking a professional business planner in developing a coherent plan, especially if you want to apply for external sources for future funding. Be modest in your profit projection rather than unrealistically optimistic. Remember if the projected profits are not sufficient, your business could be unsustainable.
Identify how much money you need to startup your business
Look at all your potential outgoings, such as rent, purchasing of equipment, materials and staffing. Then use your business plan to forecast how much money you will have coming in each month from sales. Your sales could be cyclical, so take into account busy periods such as Christmas and notoriously quiet months like January.
Build into your forecast amount a contingency to allow for unforeseen circumstances such as failures in the manufacturing process.
The most traditional funding option is to apply for a business loan, some business loans have the option of building a loan tailor made for your individual business such as LoanBuilder.com. It is important to only use the business loan for specific business purposes identified in your business plan to avoid too much debt.
Sometimes bad credit means that a business loan is not an option, in which case the best option would be to borrow from friends and family. You could also consider crowdsourcing platforms, where investors donate to business that they feel are potentially viable, in return for some kind of reward.
Overdrafts and credit cards are funding options that you should consider as a short term option.
Sometimes grants are awarded to help with business startups and there are often competitions available to enter which award winning businesses finance.
Create a side hustle
To generate more cash, it may be possible for you to offer services that are not directly related to your business. Perhaps you are a whiz at fixing computers, website design or teaching skills? You could also generate money by buying and selling on auction sites, such as eBay. Be creative so that you can fulfill the dream of your business launch.
Make use of freebies!
There are so many free resources available to access, both online and off. Libraries often run free courses on skills relating to business and information technology. Local governments often have small business advisers who offer training as well as one to one advice.
You could also market your business for free by the effective use of social media platforms, such as Facebook, Twitter and Instagram. By posting regularly on social media, your audience and therefore potential customer base is huge!
If you are starting your business with only a small amount of money, you will need to work hard to keep the business afloat. With passion and determination it is possible to start a business on just about no money at all, but it will require dedication!