Funding your Business Guide

You may well have to consider support from a partner or other paid work. If you look after the pennies, the pounds will look after themselves is the adage that makes sense here. You will also have greater control over the finances, reduced worry about paying back loans or having an equity partner in the business. Family and Friends Your personal network can also fund your business with potentially favourable terms. This may be an interest free loan, a gift or an investment with some equity in the business. You need to be clear what the relationship is, the terms of the agreement and have this in writing. They may want to see your business plan and understand what you are going to put in to get started. Generally, loans from family can be at low or zero interest, have flexible payment schedules, with options to increase or pay back the funds without penalties and no credit check required! The downside arrives if you fail to repay on time or they suddenly need the funds back or the relationship becomes damaged in some way. That can create friction and difficultly at a time when your business needs stability and investment.

Tips Here are some questions to ask yourself about your investment needs. What is the least amount you need to get started? What could you borrow or lend rather than purchase? What could you buy cheaply or second hand? What can you do yourself rather than pay someone else? Do you really need that serviced office? Bootstrapping Using your own savings or income to start a business is a sensible way to get moving. This capital may come from savings or earnings from a current job. You could also add any profits from early sales to fund your operations and to avoid any form of borrowing. Businesses that grow this way are mindful of their operating costs and usually focus on essential expenditures. This is a very lean way to grow your business and generally growth happens organically. You would add products or services as the business allows. Taking as little profit as you can out of the business means you will have to work on that survival budget.