Starting your own business can be a great idea. But getting your business up and running is expensive! You may need to buy special equipment for your business or hire employees. You will need to register a company name, easily done via a company formations agent. And you may need to rent a work space.
Here are some ideas about how you can put together the money you need to start your own small business.
Use Your Nest Egg
Do you have money saved? If so, that money can come in handy when you are ready to start your own small business.
Your savings could pay for the supplies you need for your business. They could cover the cost of registering the new business. And they could pay for your living expenses while you are getting your new business off the ground.
Be careful, though! Using up your savings is risky, since you may need that money in case of an emergency one day.
Find an Investor
If you have a solid business plan, you may be able to find someone to provide you with financial backing. Investors provide funding to get a business started, in return for a share in the profits later on.
Your friends and family might want to invest in your new business. After all, they know you well. They are in a good position to see whether you have a solid business plan and a strong work ethic.
Sometimes investment managers also decide to back new businesses.
Finding investors can be hard, depending on what kind of business you are in.
Get a Bank Loan
Many banks provide business loans. If the bank decides that you have a solid business plan, they can give you a loan to get your new business started. Banks also provide payment plans so that you can repay the loan over a period of time.
Bear in mind that banks may charge high interest rates on the loan!
The government has programs to help small businesses get off the ground. The government provides start-up loans, which range in sum from £500 to £25,000.
The government also provides some grants to small business owners. Grants do not need to be repaid. Of course, there is a great deal of competition to get those grants, so they can be quite difficult to obtain.
The government provides a range of grants, each intended for a different purpose. Some grants are designed to pay for taking on apprentices or for training new employees. Others pay for building repairs. However, the grants can be limited to certain types of businesses, or to certain locations.
Look for Help from the Crowd
Sometimes crowd-funding sites, like GoFundMe or Kickstarter, can help get a business going. Crowdfunding website ask the general public to donate money to help start a new business. In return, the founders may receive early access to the new business’ products. Or they may receive some sort of special reward for their investment.
When you seek crowdfunding, it is best to be very specific about how the money is going to be used. Will it be used to buy equipment, or provide training, or register the new business? Your potential funders will want to know.
Crowdfunding sites will also ask you to set a specific target for funds, ad you won’t receive any money unless you reach that target.
How Can FSB help?
FSB business creation can help with many aspects of starting a new business. FSB can provide you with:
- Help forming your company
- A help line to give advice to new business owners
- Insurance services
- Payment services
More information about FSB is available on the website FSB.org.uk