No matter what industry you choose, where you set up, whether you’re in your home office, working on the move, or have a tower block office – your startup business isn’t cheap. You have the set-up costs of an office and any physical products,. You also need to think about your website, advertising and other marketing tools, as well as any employees or outsourcing that you may need. So how are you funding your business start up?
For many people, their savings that will take the brunt of the costs. Starting a business through what you have saved up is the dream – nothing to pay back and hopefully you have enough there to keep you going for a while. Just don’t over stretch yourself. If you need to look at the other options to top up your savings, that’s fine. Having a reserve of money is great when you have a start-up as there is always something that is going to go wrong or cost a little more than you expected.
Some governments give business start-up grants to entrepreneurs. This is a loan that you don’t have to pay back – so really it’s free money. Think of it like a scholarship for business – you have to put in the work to qualify.
Business loans are everywhere. You can compare them on comparison sites or go straight to a highly-rated loan like SummitFR. Either way, a loan can be the best or only option for your start up. Business loans can come with a hefty interest rate due to the amount of new businesses that fail before they can pay back the full amount. You’ll want to make sure you shop around and choose a loan that is comfortable for you. It can be tempting to apply for more than you need, but you have to be able to be able to pay it back over the agreed time, so don’t be greedy.
Crowdfunding works in two ways: the first is that people give you money to start your business out of the kindness of their hearts. You don’t have to pay the money back, nor do you have any obligation to give the generous donators a share in your company. The second way works with investors; they are giving you money in exchange for either a share in the business or a share of any future profits. Crowdfunding has become increasingly popular over recent years and is something you should definitely check out.
Working with investors can be a lot more complicated than what you see on Dragons Den. However, the principle is the same: an investor is buying a portion of your business. They have a say in what you do and get a cut of your profits. It can be a great way to gain industry knowledge and standing if you partner with an experienced investor, but it can also be hard to be heard among the throngs of other entrepreneurs. So, get your business pitch polished and ready.