How to Fund Your Business Idea
You’ve got a business idea that you want to turn into a reality? Funding your business is one of the key considerations for successfully getting the ball rolling. Whether you need to buy equipment, buy stock, or market your offering, business funding is essential. In most cases this will involve external sources, such as banks, fast payday loans, for financial assistance. This article takes a closer look at your options.
How Much Money Do I Need to Launch My Business?
How much money you need will depend on the business itself. Some business ventures will need significant investment to cover equipment or offices. For example, a manufacturing business will need expensive machinery and tools as well as a dedicated workshop and factory site. In comparison, other types of businesses have minimal overheads, only requiring a laptop and internet connection at first.
It’s important to consider the needs of your business before you think about how much money you need to fund it.
How Do I Fund My Business Without the Bank?
With all the right preparation, you hope that any business idea will succeed and take off with flying colours. However, it’s not always plain sailing when it comes to business and there will be plenty of trial-and-error moments in your journey. That’s why it’s important not to load your business with debt before you even start trading or before you feel confident your business is stable enough.
Using your own funds is the most sensible and logical place to start when you’ve got a business idea to explore. You could fund your start up through savings, redundancy payments, inheritance, or retirement funds. There are a few examples of what you could use. If you have any valuable assets, such as jewellery or a car, you could consider getting an asset-based loan, or simply sell an asset to fund your business idea.
Another way you can fund your business yourself is by borrowing from friends and family. However, often people like to stay away from mixing business with close relations given the politics that can evolve. There may be a family member who might want to join forces with you on a business idea.
In general, the more self-reliant you are when it comes to funding your business, the more reliable you will seem in the future when it comes to seeking investments. After all, how can you expect others to invest in your business when you haven’t done so yourself?
Is It Possible to Get Business Funding from My Bank?
In short, yes, it is. After all, despite your best efforts to fund your business yourself, sometimes you need to turn to commercial lenders for financial support. It’s important to bear in mind that many external sources of funding will want to ensure your business is a safe and reliable business to invest in. It’s unlikely to get funding for an untested business idea. It may be a good idea to create a business plan and put together a ‘pitch’, so to speak, of your business to offer confidence and reassurance in those you’re seeking funding from. This should outline how much money you need exactly and why you need it. It should also include a plan of how the money is going to be spent and forecasted returns. It’s also important that you are realistic with the risks associated in your business idea and explain how you would manage such risks, rather than being naively optimistic.
Article by Saad Shafiq
