bizSimple

The simple way to start a business.

Monday 6 September

“A good job well done will lead to more”

Money

There are very few businesses that don't need any financial outlay to get them going. At the very least you will need money for basics like business cards, stationery, bookkeeping records, advertising and money to live on until you get paid by your customers.

You might also need money for tools and equipment, a vehicle, materials, stock, additional training, a computer and software.

A good approach is to make a list of everything that you think you need and then split your list up into 'Essentials' and 'Nice to haves'. Could you hire equipment until you can afford to buy it for your business yourself?

You will also need money to keep the business running. This is called 'Cashflow' and every business needs it. The bizSimple Toolkits will help you to plan your expenditure and complete your own financial forecasts. These are a vital part of your business plan, as they tell you how much money you will need and how much money you will make!

FAQs

What can I do if I haven't got enough money to start my business?

If you haven't got enough of your own money you will need to look at alternative sources. Most commonly this is in the form of a business loan.

Loans can come from family members, friends, or commercial sources such as banks. Commercial funders will want to see a business plan that includes a cashflow forecast for at least 1 year and a profit forecast. The bizSimple Toolkits and business plan pro-forma are ideal for this.

Can I get a grant to start my business?

Grants are few and far between and they always come with a catch, for example, they are very rarely more than 50% and often a lot less!

Your local council or Enterprise Agency will be able to tell you if your business qualifies for any grants, but beware – qualifying to apply for a grant is very different from actually jumping through enough hoops to be awarded the grant.

How do I find a good bank?

Shop around. Make an appointment and leave a copy of your business plan for the Lending Manager to read before the meeting.

Ask about free banking and what you will be charged once bank charges kick in. Don't forget, banks are like any other business – they are competing with each other to provide you with a service and to make money in the process, after all that's what you're planning to do, isn't it?

How long will it take to get a loan or a grant?

If you have a good business plan and at least 50% of the money you need, getting the rest should not take long. The quickest form of lending is via a bank. The less money you have to put in, the longer it will take to raise the money you need, and you might fail altogether. After all, if you are asking someone else for all of the money to start your business, you are asking them to take all of the risk!

If you have a bad credit history this will reduce your chances of getting a loan.

Grants can be tortuously slow and can seriously hold up the start of your business.

How can I avoid getting into debt?

The short answer is that you can't. At some stage, if you are running a business, the chances are you will be in debt. The trick is to manage your debts to make sure you are also making money! The bizSimple Toolkits show you how to do this.

Will I have to guarantee the money I borrow?

This depends on the amount and the reason why you need it. The larger the amount, the more likely it is that you will be asked for a guarantee. The larger the borrowing, the more you risk your personal assets, but if this is the only way to borrow the money you need, you need to be sure you are happy to take that risk before signing on the dotted line. (We're back to good planning again!)