| It all starts with a great idea, an idea that | | | | trust you, don't forget that you are |
| has probably been in your mind for a long | | | | developing a very different relationship |
| time. You have the product sorted out, how | | | | which can quickly turn sour. Be prepared for |
| you are going to deliver your service, where | | | | rocky times!Bank Line of Credit or LoanNow |
| you are going to set up your office and how | | | | you're getting into the serious stuff! |
| you are going to market your new business. | | | | Getting support from a Bank for a new |
| But the stumbling block always seems to be | | | | business is tough, as many entrepreneurs will |
| the finance to get you going.Finding the | | | | testify. One sneaky way is to apply for an |
| finance to get a small business off the | | | | unsecured loan while you are still in |
| ground is a major issue for any potential | | | | employment. If you have planned things right |
| small business. Some new businesses lend | | | | you will know when you are starting up, so a |
| themselves to very little start up capital | | | | few months before you pack your job in, apply |
| because the main selling point is the owner's | | | | for a loan based on your salary. However, |
| skills and knowledge, for example | | | | make sure that you can comfortably meet the |
| consultants, web designers, PR specialists. | | | | repayments. There is no grace period; you |
| Businesses which require stock holding, plant | | | | will be expected to pay back immediately, so |
| and equipment and other investment, face the | | | | your business will have to start earning very |
| real challenge of getting their start up | | | | quickly.The alternative is a business line of |
| finance together.So what sources can you tap | | | | credit facility. There is no fixed repayment |
| into to ensure your business gets off to a | | | | date, although they will be for periods from |
| solid start?Your SavingsThe first port of | | | | 6 to 12 months, and all you have to do is |
| call! If you have been in employment for some | | | | ensure that you keep within the overdraft |
| time then before going it alone you should | | | | limit. You will have to write a business plan |
| hopefully have some spare cash behind you. | | | | to present to the Bank which outlines your |
| Whether this be in the form of cash in a | | | | idea and the business.Mortgage or Equity |
| savings account or shares and unit trusts, | | | | ReleaseWith the way house prices have been |
| this is a good start to your fund raising | | | | increasing over the last few years, the vast |
| exercise.You can be more focused in saving | | | | majority of people now have substantial |
| cash if you have had the goal of setting up | | | | equity in their homes. The cheaper |
| your own business for awhile. Knowing you | | | | alternative to a Bank overdraft or loan is a |
| need to save to get your business off the | | | | mortgage. The interest rate is lower and, as |
| ground will make sure you don't spend your | | | | the repayments are spread over a longer |
| future nest egg on unnecessary items. Whilst | | | | period, the monthly repayment is less |
| a new Plasma TV or the latest DVD Recorder | | | | (although you will end up paying more |
| may seem to be an essential purchase, knowing | | | | interest in the long run).The disadvantage of |
| that you have a business to set up in the | | | | raising cash this way is that your home is |
| future will be sufficient a deterrent to keep | | | | potentially at risk. If meeting the monthly |
| the cheque book firmly locked away!Keep Your | | | | repayments is dependent on what the business |
| JobSome business owners are lucky enough that | | | | can generate then a slow start could cause |
| during the early days of the business they | | | | cash problems. So be very sure you can meet |
| can keep the day job while working on the | | | | the repayments even during a lean |
| business during the evenings and weekends. | | | | period.Credit CardsIf you haven't got any |
| This has two benefits. Firstly, they are | | | | savings, can't get support from family or |
| still earning thereby allowing more time to | | | | friends, or a Bank loan or mortgage, then |
| build up a cash reserve. Secondly, it's an | | | | there are your credit cards! However, whilst |
| opportunity to test out the business to make | | | | it's easy to draw down on your card, be wary! |
| sure there is a market.Make sure that you can | | | | Credit cards are the most expensive form of |
| realistically keep both balls in the air at | | | | debt.They are ideal because all you may have |
| the same time otherwise you will end up doing | | | | to do is pay the minimum amount but card |
| justice to neither your job or your new | | | | debt, as most people have found out, can be a |
| business. The support of your family is also | | | | long term burden. But, if you need a cash |
| essential if you are to follow this strategy. | | | | lump sum to kick start the business and you |
| They have to accept that what used to be | | | | know you can pay it off within a few months, |
| 'family time' may have to take a back seat | | | | then it's an alternative source of finance |
| until you decide to concentrate on the | | | | worth considering, if somewhat |
| business full time.Family and FriendsThese | | | | unorthodox!Business GrantsBusiness grants are |
| can be a useful source of finance for any | | | | available for specific industries, sectors |
| start up. If you have harboured ambitions to | | | | and reasons. Grant providers will usually |
| run your business for some time, then many of | | | | only give a portion of your requirement, so |
| your family and friends are already likely to | | | | they cannot be used to totally finance a |
| know about your idea. You should therefore | | | | start up. However, they can be useful in |
| have an indication who is for it and who is | | | | filling a funding gap.Business AngelsA |
| against it.If you haven't shared your secret | | | | popular way to fund a business are Business |
| desire then it's time to be slightly devious! | | | | Angels. These are people, usually retired or |
| If you are in the early planning stages start | | | | successful business people in their own |
| drip feeding your ideas to key people whom | | | | right, who are looking for opportunities to |
| you think are likely to support you. Tell | | | | invest in new businesses.In exchange for an |
| them your ideas, share your ambitions and | | | | investment they will typically look for a |
| goals and on a regular basis update them with | | | | shareholding in the business and some |
| your progress. The plan is to get them sold | | | | hands-on involvement. They will have a vast |
| on you and your future business at an early | | | | business experience and so are useful people |
| stage.Once you get to the point where you are | | | | to have on board. However, you will have to |
| ready to start asking for contributions hold | | | | accept an element of loss of control but that |
| an Investor Evening. Prepare a presentation | | | | needs to be balanced against your desire for |
| outlining your plans, the business, the | | | | funding.Getting finance for your new business |
| market etc. Show the potential investors what | | | | can be a challenge but there are a number of |
| their return will be in recognition for | | | | avenues to explore and so with dedication and |
| supporting you.Invite as many people as you | | | | focus you could soon be on your way to |
| can and promise an interesting and fun | | | | launching your own small business.Small |
| evening, Be bold at the very start; tell them | | | | Business Success is a resource dedicated to |
| exactly why they are there, so there are no | | | | helping small business owners be more |
| misunderstandings. After you have done your | | | | successful. If you are looking for a regular |
| presentation gather all the names of the | | | | flow of ideas and tips then subscribe to |
| people who may want more information or even | | | | Small Business Success a free newsletter, |
| a one-to-one with you.Whilst this group are | | | | which provides you with quick tips, ideas and |
| people who know you and so are more likely to | | | | articles. |