Starting a new business is always a great idea. Many people dreamed of owning their own businesses; to finally escape the vicious cycle of the 9 to 5. In fact, most employees these days do not envision themselves spending all their productive years working for big corporations. Most of them hope that, at some point, they would be able to save up enough to start their own enterprise. To finally upgrade your title from “salaryman” to “business owner” surely has a nice ring to it.
However, starting a business is only possible if you have the courage to just go for it. Dreaming for better times to roll by isn’t exactly a foolproof plan. For some, they get lucky. For others, they end up as frustrated dreamers who never got the chance to materialize their aspirations. Luck is undoubtedly a factor to consider in business – but so is hard work. In fact, the chances of your business attributing its success to hard work are far greater than luck alone.
If you have a winning idea for a new product or service; the guts to let go of everything and focus your energy into making your newfound business idea a success, and confidence in your ability to sell, then you don’t have to wait until retirement to start your own company. There are other means to acquire funding – and if you’re already decided, we can help you out.
Here are four great ways to acquire funding for your new business idea:
It is the age of the internet. Everything is accessible and within reach – even customers and investors you haven’t met yet. There are many people who would be interested in investing or purchasing your products and services even if you haven’t exactly materialized the idea yet. Crowdfunding can help you raise the amount you need to start selling.
There are generally two ways to do this. One is consumer-based crowdfunding. For this, you can take advantage of platforms like Kickstarter to reach a good audience for your pitch. The idea is to attract buyers for your product or service so that you have enough guaranteed sales to ensure the success of your product’s launch. These buyers place orders in advance and pay you in advance as well.
Not only do you get enough money to fund your new business idea, you also get people to try using your products firsthand and give feedback. This is a win-win situation since you don’t have to produce the funding yourself and you get to profit off a little from the initial orders. It also saves you from the crippling interests of lending.
Another way is investor-focused crowdfunding. There are also online platforms for this; one example is Seedrs. People who support your business idea or “pitch” can contribute to the business fund. In turn, they get equity and are regarded as shareholders of the company you’re planning to put up. Again, it’s a win-win situation, especially if your business is not product-based and more service-oriented instead.
Just like the name suggests, angel investors are “heaven sent” for upstarts. There are wealthy investors all over the internet. Just as you are looking for someone to fund your big business idea, these investors are also looking for the next big thing. In a way, you both have similar interests. You only need to find each other and hope your aspirations match.
Most angel investors are business owners themselves. Oftentimes, they own big enterprises and are looking for startups to support. To catch their eye, you need to have a thorough business plan with desirable profit projections. When they see potential in what you propose, angel investors can easily provide you with more than enough funding. For you, it’s a blessing. For them, it’s a gamble. If your company becomes a success, they will have some of the biggest shares since they are the initial investors.
If you are confident enough in your business idea, and you know for sure that you are going to sell, then all that’s left to do is create the perfect pitch to reel in angel investors. You can try to schedule one-on-one meetings with them, although finding them would already be a challenge. You can also join angel investor networks online so that you’ll have a better idea of where to start.
UK Government Start Up Loan Scheme or Small Business Grant
The UK government is also incredibly supportive of small businesses or startups. There are various loan schemes and even grants that you can consider applying for. With the recent plummet of the UK economy due to the Coronavirus, the government is keen on backing up local businesses now more than ever.
For example, there is the Startup Loan Scheme which is a government-backed loan scheme that will allow you to borrow an amount between £500 and £25,000 with a competitive interest rate of 6% per annum. The loan period is also quite considerate ranging from 1 to 5 years. This loan scheme is for people who are looking to launch a small business or expand an existing one. You can check out the application process here: https://www.startuploans.co.uk/.
You can also watch out for Small Business Grants which are available to UK businesses that help innovate or move the economy forward. If you have a groundbreaking idea, or a new product invention you want funding for, you can reach out to local authorities to explore your options.
Reach Out To People You Know
Lastly, there’s nothing wrong with reaching out to family members and friends if you can take out a small loan from them. Borrowing money from people you personally know may help rid or lessen interest rates. You can also avoid the strict requirements most lenders would ask of you. If you’ve got good trust built within your circle, you may be able to find some friends willing to help you out in this new venture. You may even propose a partnership if that is something that works for the setup you have in mind.
Anyway, starting a business from scratch can be incredibly challenging, especially when it’s your first time venturing into the world of commerce. If you have questions or business-related inquiries, Annette & Co. is here to help. We offer startups FREE business consultations so that you can receive better guidance on your next big move.