Having a fantastic business idea is one thing, getting it off the ground is another. There is so much that goes into launching a new business and one of the biggest aspects is the finance. After all, a business cannot get off the ground without money behind it to run correctly. Finding the right finance in any economy is a challenge, and at the moment, securing finance for a start-up is difficult.
There are many ways out there that you can finance your business, but before you can do that you have to look at your budget and what you need. There’s no point in finding finance if you don’t know how much finance you need! Look at how much your premises will cost, how much you need for insurances including public liability insurance, and any insurance you may need for a financial contractor. You also have to think about staff wages, what you pay yourself and any money you need for suppliers. Once you have established your business finances in your business plan, you can then begin to work out how you can get the finance you need. Check out our list below for ways you can finance your business:
Bank Loans. The most common way of financing your business is to get a bank loan. Sitting down with your bank, opening a business account and getting finance is the best way to go about a new business loan. Most banks have tightened up on their lending, but have criteria aside for small business lending that a lot of people are not aware of.
Credit Cards. This is a risky one, but some small businesses are able to fund their business with credit cards. If you fall behind on the credit card repayments, you take a hit to your credit score, which can be detrimental to your future business dealings and even your credibility. However, every business should have a credit card and use it responsibly so that they can have it for emergency purposes and one of business expenses.
Crowdfunding. This method of finance is becoming more popular as the years go on. Crowdfunding a new business can be a fun way to get everyone you know involved and it can help raise money in the form of events. Sites like this one are great to getting a start with your crowdfunding, but remember that it isn’t a long-term solution. There isn’t a long-term investment available and you will need to think of something for that instead.
Savings. For some new business owners, they have used their own money from savings or inheritance to kick start their business. It’s a risk, to put personal money into a business idea, but it’s one that can be worth it if the conventional ways to gain finance for your business are not viable for you. Financing your business yourself is a big job, and you could take a risk and lose your own money. Deciding if it’s worth it is up to you.