Financing a Business is the first step to making your dream a reality. Here are 5 ways to finance your startup.
The biggest stumbling block for people wanting to set up their own business is financing the venture. Every new online business needs startup funds for equipment, stock and marketing even before making that first important sale.
There’s a variety of finance options available to you depending on how much funding your business requires.
- Your Own Money. You will need to invest some money if you are to attract financing from elsewhere. Nobody is going to invest if you’re not going to put up any money yourself.
- Friends & Family. Don’t you just love them when they believe in you and finance your dream. But beware if things turn sour. It can put a great strain on relationships and cause terrible rifts in families. Keep it businesslike, draw up agreements so everybody knows what to expect and when.
- Bank Finance. Before our economic downturn banks were only too willing to provide you with a loan, overdraft or credit card to help finance your business. However, getting the same provision now is alot tougher. It would be a good idea to make an appointment to see the Business Manager at the bank who will be able to take you through the steps of securing funds.
- Remortgaging. Again, pre-economic downturn, remortgaging your home was easy. As long as you had equity in your property you could borrow. However, the mortgage market has changed considerably recently and it’s not so easy now to obtain funding this way without being asked to provide some kind of security, usually your home. So make sure you understand the implications before you sign on the dotted line.
- Business Investors. These come under the umbrella of venture capital firms or angel investors who usually specialise in an industry they know well so the clue here is to pitch to the right investors who specialise in your niche.
Good planning is essential to get an accurate idea of your financial needs. Apart from your startup costs, you will need to calculate running expenses as well as ongoing bills. Writing a business plan should help as this financial information needs to be incorporated and, of course, any investor in your business will want to see your business plan, especially the financial section, so make sure the financial information stacks up.