5. How to fund your startup business

5. How to fund your startup business Piggy Bank by prettywar-stl

This article was written by Fiona Timba, published on 21st November 2012 and has been read 24410 times.

After the ‘big idea’ one of the first stumbling blocks of starting a business is money. Working out where you’re going to get the spondoolies to support your plans can be tricky but it certainly shouldn’t put you off pursuing your goals.
From the offset, we were pretty fixed on the notion that we wanted to fund Packed Munches ourselves without outside investment. Call it stubborn and selfish, but we didn’t like the idea of having to share our business with anyone else, or having to answer to anyone. We didn’t have much saved before we started, but once we’d come up with the idea we knew we wanted to start immediately. This meant devoting a bit of cash from our wages each month to support the next stage of creating our business. The official business term for this method of funding is Bootstrap. It’s slow and arduous, but this method means you spend your (limited) funds wisely and stay in control of your business. If Bootstrap isn’t for you there are other ways to fund your business, you may decide on one or a few of the following methods.

Grants

One of the best ways to support the Bootstrap method is to apply for grants. Business grants are lump sums of money given out to help your business or idea grow. Business grants are given out by the government, big corporations and charities to name but a few. You don’t have to pay a grant back and you don’t have to sign over a percentage of your business. All you need to do is fit the criteria required, present a sound idea and hope for the best.

As you can imagine competition for these is rife. We’re currently through to the semi-finals of the Shell Live Wire Award. We stand to win a grant of £1,000 if we are chosen as the winners. This would allow us to bring our launch date nearer so that we can start serving our customers sooner. Winning the award partly relies on the public vote, so please take the time to click HERE watch our (hilariously budget) video and vote for us.

Investment

Think Dragons Den here. If you need a quite a bit of capital to get you started, you may want to look for investment. As well getting the readies you need to get you going, investment can be a great way to get support and business knowledge from someone who has already succeeded in your chosen industry. An ideal investor will bring both money and know how to the table.

Loans

The banks may not be so forthright with the cash nowadays so if you get turned down there, there are other ways in which you can source a loan. There may be members or your family in a position to lend you the start-up capital you need. There are also independent firms that offer micro loans (usually less than £25,000) to start ups.

Crowd Funding

This is where you get people you know, or members of the public to donate small amounts of money to help get your business going. In return you can offer your mini investors anything from a branded mug, a thank you on your website or a discount for your service or product when you’re up and running. Websites such as Crowd Cube and Crowd Funder can put you in touch with people who are ready to invest in this way.

Remember to visit the Shell Live Wire site and vote for Packed Munches. Thank you!

Fiona and Sabrina

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