Raising finance is obviously an important part of business survival as most of the time because of time between start up and your first order or payment for sales the business will continue to need working capitalÂ
Not many opportunity seekers today have the financial means to starting up a profitable business. If you’re starting a business where you will be marketing products and/or services, promoting your business is paramount as well. If this is your own business concept and is a start-up business financing may be a critical factor if you want to hit the ground running.
Unless your situation is completely unique or you are financially well off, you are no different from millions of other entrepreneurs in that there is a real possibility that you are going to have to obtain one or more of the following types of financing:
- Capital for your living expenses
- Operating capital
- Start-up capital
- Venture capital
Additionally, you can finance your business in a number of ways, but before you start to withdraw funds from your Savings or retirement account, create and develop your business plan so you have a clear and concise picture of the amount of financing that you feel you is required for your business to get up and running.
Why Start-up Finance is so importat?
There are 5 key reasons why financing plays such a critical role with any start-up business:
- Pre-opening Expenses – consider all the expenses you are going to incur before you ever open for business when you finance this aspect of your business
- Operating Expenses – raising finance helps to offset certain operating expenses such as advertising and marketing, payroll expenses, and stocking your inventory
- Cash Flow – this is considered the lifeblood of every business and despite the fact that it could (and oftentimes is) included in business start-up financing, you will find this to be an ongoing requirement
- Equipment and Fixtures – computers, copiers, fax machines, and telephones are the key pieces of equipment, whereas fixtures relate to your display cabinets and shelves for your inventory. It may be necessary to raise finance for these.
- Your Personal Living Expenses – how are you going to maintain the lifestyle you had when you open your own business? If leave your career for this, you’re leaving behind guaranteed income.
Keep in mind that there is a wide array of financing sources available in the UK. Your family and friends can even be sources if you choose to use them as such and if they agree to that. Additionally, UK government grants and other lending sources are available. You just have to put in the due diligence and find them.
Hicks Stephens will sort out your Tax Returns at an affordable price. There are nearly 5 million registered business in the UK, of these, just over 99 percent are considered to be “small” with turnover of £5.6 million or less and employees of fewer than 50, so you are not alone in your ventures and there will be other who are having the same problems as yourself.