Launching your own business is easier today than it has ever been before. The growth of the digital world, combined with things like new sales strategies such as dropshipping, means that anyone can start a company, without even having to have their own product distribution strategy. However, just because there are easier ways to run a company today, doesn’t mean that there aren’t challenges to address too.
One of the most common issues that any business owner will have to overcome when they’re first trying to bring their venture to life, is finding a way to finance their new company. Here are just some of the ways that you might be able to find the cash you need.
Business loans are probably the most obvious and popular way to get funding for a new company. Depending on your circumstances, you can get anywhere from £1,000 to millions of pounds towards your venture. You then pay back what you owe over a period that you agree with the loan provider.
There are many kinds of business loan available. Some of them work in a way that’s very similar to having your own personal loan. On the other hand, other loans are designed to take advantage of things like your unpaid invoices or credit card sales. The biggest downside of business loans is that they often require you to prove that you’re going to have a regular source of income. That can be hard to do if you’re starting a new business.
Funding your business using personal credit cards is rarely a good idea. However, there are lines of credit that you can take out just for your business. With a business credit card, you can make a multitude of useful purchase for your company in the same way that you would use a personal credit card. Business credit cards are ideal if you need to borrow cash to pay for your typical everyday expenses and transactions.
Additionally, some business cards come with excellent deals attached to them, like 0% interest rates for several months, or cashback and rewards on your purchases. However, like business lending options, you do often need to have an established presence to take advantage of business cards.
You’ve probably heard of crowdfunding before today. There are plenty of sites out there where people can ask others for money to fund their operations, personal projects and new ideas. You can also use crowdfunding as a way of getting money for your new business. However, it’s worth noting that these platforms are very competitive, so you’ll need to make sure that you have a very exciting idea in place if you want to capture the attention of investors.
Business crowdfunding is excellent for any company that wants to borrow money from investors and pay it back over time. You can also promise your crowd funding customers one of the first items from your new product portfolio too.
If you have a particularly thrilling idea for a new business that’s going to benefit the economy or society in some way, then you could even benefit from a government grant. There are grants out there throughout the UK that can help to support new businesses of all sizes. These are excellent if you’re in a specific niche, or you’re creating a company in a specific situation. For instance, there are grants out there that are just for female entrepreneurs.
The best thing about getting a grant is that you don’t have to give the money back, and you maintain complete ownership of your business. However, you might not be able to access all the money you need to get your company up and running via grants alone.
Finally, one other option you can consider to fund your new business is an angel investor. Angel investors are people that give you money towards the growth of your business in exchange for ownership over a part of your company. The angel investor gets equity in your business, and you also need to keep them informed about what’s going on with your business. Although Angel investors usually stay out of the everyday way that you run your business, they might set restrictions on what you’re allowed to use their cash for.
With angel investors, you don’t necessarily need to pay the money back, but you do lose some ownership over your brand.