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