Funding Your Own Business
You’ve got the best idea for a business that’s going to take the world by storm, making millions every single day. What? You won’t let us know? Darn it, now we’re going to have to think up our own plan. Fancy giving us a hand? No. Okay, not to worry. So, what did you even come here for?
Ahh, how to fund your business, that’s right. First things first, don’t rely on Dragon’s Den! The Reggae Reggae Sauce story is a nice fairy tale to dream about but it doesn’t happen every day of the week. You should look further afield when it comes to funding your own business. More on that in two ticks.
Whoever lends you money, bear in mind CAMPARI:
- Your Character and Ability
- The Margin you will earn
- The Purpose for the loan, grant or gift
- The Amount you need
- How you will Repay what you owe
- The Insurance you are able to provide.
But where to find the funds?
Family & Jobs
Your parents may be able to help you out in the initial stages of starting your business, or you may have recently inherited some money from your great-great aunt Hilda that could be put to good use. Don’t expect your family to bankroll your business idea though, they have bills and mortgages to pay!
Keeping your day job whilst you set things up is also an option. It may involve long work hours but hey, you reap what you sow, right?
Investors, Grants & Loans
Investors? But AllAboutCareers.com said to forget about Dragon’s Den. Yes, we did say forget about Dragon’s Den, you’re not wrong there. We didn’t say to not consider business ‘angels’ though – wealthy individuals who invest in new businesses for a percentages of the returns. The UK Business Angels Association and the Angel Investment Network are worth checking out if you go down this path.
Local, national and European government grants are also available, as are soft loans. These aren’t loans that feel like a pillow or cushion, but ones that have more favourable terms. They’re available from local authorities, enterprise trusts and professional organisations.
Another option is to scoot on down to the bank and see if you can get a loan from them or get an overdraft if you only need a little bit of money.
Charities & Crowdfunding
Yep, believe it or not, there are charities out there who help young people set up businesses. The Princes Trust is one charity that is dedicated to getting young people into work. Along with developing key skills, confidence and motivation in young people, the trust runs an enterprise programme that provides money and support to help those trying to start a business.
Another option is to secure funds from multiple investors using crowd funding. Websites such as Kickstarter allow you to crowd source money. It’s also a great way to reward investors who contribute different amounts. If they give you £10, regular updates of where the company is going is sufficient reward. If they give you millions, nothing less than shares of profits is acceptable!
Starting a business is tough, and funding is where most people slip up. There are options out there though, you just have to look (and work!) hard enough.