Financial support

Start thinking about how to fund that business idea.

Starting your own business will take a lot of time, effort and money before you start making a profit. So where can you go to get some financial help?

You've got a product, you understand your market and you're developing your business plan. Most businesses, as they are setting up need a little bit of financial support to get the up and running. Here's just some of the support and loans that are available to you.

2015_01_22_GatesheadC_0837.jpg

Government schemes

You might be able to get help from a government-backed support scheme if you need some initial funding to test and develop your business idea. The Government offer a range of grants, finance and loans, business support such as mentoring and consultancy for start-up businesses. Their website has a handy tool to help you find what you need. 

 

Andrew Short - 032.jpg

Selling shares

If you need more investment, you might be able to raise money by selling shares in your business. You could ask friends and family to invest or you could look into what is called 'equity funding' where you gain investment by giving up a share of your business. The investor would then take a share of any profits or losses that the company makes. There are many different ways of doing this including business angels, venture capital, crowdfunding or alternative sources of funding such as peer-to-peer lending.

 

homeslide.jpg

Get a bank loan

One option to cover your start-up costs is to get a bank loan. Before approaching you bank, you'll want to have your business plan prepared.

The advantages: unlike overdrafts you're guaranteed the money for the term you agree and the loans can be tied to the lifetime of equipment or assets that you are purchasing with the loan. Most importantly you won't have to give the lender a percentage of your profits or a share in your company

Disadvantages: you may struggle to meet monthly payments if your customers don't pay you or if you have to pay for unexpected items and if your loan is secured against your personal property or assets then you could lose them if you don't keep up the payments.

 

2015_01_22_GatesheadC_1171.jpg

Crowdfunding

Crowdfunding is a relatively new and easy way of raising money to start a project or business.  It works by raising money from a large number of people, usually via the internet using a crowdfunding platform such as Kickstarter (https:///) or Indiegogo.

Basically you propose your idea via the platform and then individuals or groups support your idea by pledging money.

Some examples of successful ideas that have benefited from crowdfunding are:-

  •          Oculus Rift (virtual reality headset for gaming)
  •          Pebble smart watch
  •          Stompy the Giant Spider - a 6-foot walking spider robot that you can ride

You can find out more about crowdfunding here.