As with any new start-up, funding your business to launch it can be a tricky time for many, however, there are various ways you can get the funding you need, including launching that all-important website.
Let’s take a look at the business funding types available and their meanings-
Business Funding Types
Bootstrapping
This is where you use your own money to get your project up and running. In business and in particular start-ups it is the most common way of funding. The good thing here is that you have full control and answer to no one but yourself, and if you are successful and look to get an investment in the future, investors will like the way you have used your own money to get to where you are. It shows confidence in your business and in you as an individual.
Equity funding
I am sure at one point in your life you have seen Dragons Den, this is essentially equity funding. Where you sell shares in your business, in return you get money and in some cases expertise from the person who has made the investment. This is why you should consider the person you are allowing to invest in your business, yes you need their money, but what can they bring to the table to help accelerate your business to the
next level?
Take a look at Seedrs website here or CrowdCube
Government subsidies and grants
These are often focused on a type of business or industry for the greater good of all, such as when we were hit with the COVID Pandemic and many businesses were forced to close. Grants were made available to businesses affected to support them thus saving jobs.
You can take a look at funding available on the government website funding page
Crowdfunding
This is a great way to raise money for your business, you not only have the opportunity to pitch to a crowd but it’s a great way to get your business in front of people. You simply upload all the information about your business and why you need the funds and what those funds will be used for. I would always suggest a short video introducing yourself and your business (keep it short and to the point). Make sure you devote time whilst you are actively crowdfunding so you can be quick to answer any questions that funders may have.
In return for individuals putting money into your funding campaign, you will need to offer rewards.
Do your homework, as some crowdfunding platforms will be better suited to your industry than others, and check what percentage they will take from your achieved funds.
Debt financing
This is when you take out a loan which then needs to be paid back. Zopa is a very good example of bringing in investors and providing loans at good interest rates, the loans tend to be without penalties if you pay them back early. The website is very easy to use and certainly worth looking at. Zopa
Revenue-based financing
This is based on your projected income, and what you have done in the past. They will assess how long it will take you to pay the loan off and set the loan term accordingly.
Which Funding Route?
The best funding route for your business is very dependent on you and your business type, and how much control you want or equity you are comfortable with giving away.
For me, it would make sense to look at government grants and subsidies first, if you cannot find information on the main government site then call your local county council and ask to speak with someone. They will be able to assist you with any active grants or may have knowledge of grants which are going to be made available.
Crowdfunding is an excellent way to get your startup off the ground if you have a good business idea, and you are passionate and driven, then crowdfunding is a great way of introducing and getting people to back you up. Make sure you share your crowdfunding campaign with as many friends and family and get them to share also.
I would also suggest that you get close friends and family on board for starting the fund off, it is far easier to start a campaign with a good amount in the pot, and others are far more likely to also get involved.
Don’t forget to offer good incentives, have a launch party, invite everyone who has helped you, and make sure you invite the press…. your marketing journey began as soon as your campaign went live.
Website For Your New Business
Getting the right website is essential to your new business, I would suggest getting a holding page (one page on the internet for your company whilst you await getting a proper website in place), as the first thing people are likely to do if you approach anyone for funding is Google you. You need to make sure you have something professional for them to find. If you have a holding page it needs to have all essential information on it to back up your funding approach which should include-
Company Name
Company Address
Contact Details
I would suggest having one for those who may wish to get involved and those who simply have an interest in your product or service info@ and funding@ for example making it clear which email is for what information.
Include emails, and telephone numbers so your business is easily contactable.
Summary of your business, products and or services
If you are looking for funding give that information also.
Transparency is key!