Setting up a business doesn’t come cheap. Start-ups need at least £23,000 to survive during their first year. This estimated cost doesn’t even include the expenses for product development and other business-related activities. Experts reveal that most of the time, aspiring business owners tend to underestimate their operation costs by at least £2,000. Unless you have a lot of money, it won’t be easy for you to start your dream business. Fortunately, today, there are several ways you can raise money for your business.
Your savings can help you transition from your previous job to your new life as a business owner. They can also help you purchase the equipment, software or other kinds of tools that you need to run your operations. However, you mustn’t solely depend on your savings to finance your entire operations. If anything goes wrong, you should have enough funds to piece things back together.
Many banks and financing companies are open to providing small business loans to owners. Some companies offer business financial services to help you understand which option will work best for your needs and budget. Each financing plan comes with different payment terms and schedule that can accommodate any type or size of business. Don’t be afraid to ask questions. Better yet, do your homework before heading to banks or business financing firms.
Funding from the government
The UK government is very supportive of the start-up industry, especially those who are in the field of technology. They provide funding, mentoring, discounted broadband services and other forms of support. Some of the options you can choose from for government funds include the Regional Growth Fund (RGF), UK Export Finance (UKEF), start-up loan, and small business grants.
Investors and crowdfunding
Crowdfunding is becoming a trendy way to raise money for business ideas today. Websites like GoFundMe and Indiegogo has helped thousands of business owners to get funding from the public’s donations. Crowdfunding is also a brilliant way to gauge how well your product or service will succeed in the market. It will also help you identify the improvements you need to make before you launch the business.
With crowdfunding, you can also attract potential investors to help you get the money you need to kickstart your plans. Interested companies or individuals can buy a stake in your future business in exchange for their financial support. You can try pitching your ideas to friends and family. Perhaps you can also try grabbing the attention of fund managers. It’s not exactly a walk in the park, but if you do get a good investor behind you, then you’re off to a good start.
Regardless of if you choose to hire business financial services, use your own money, raise funds from your friends and family, pitch your ideas to other business owners or apply for government funding, be sure to understand what’s at stake, and put everything on paper. Each source of funds comes with different risks. As such, you need to study each of them carefully before you finally decide which option you will choose.