It might also be worth looking at the site makeitcheaper.com, which is a comparison site that provides you with all the best deals for phone, energy and utility costs. This will allow you to obtain the best initial deals for your business essentials, and will help you keep your sustaining costs to the absolute minimum.
With the economy finally improving, growth forecasts looking positive and interest rates low, it can be argued that there is currently an excellent window of opportunity for aspiring businessmen to capitalise on during 2014.
Last year, over half a million new businesses signed up with the Companies House, marking an 8% increase from the year before and it is hoped that this upwards trend continues into the current year as well.
Of these new businesses, a monumental 95% identified that they were started up by individual people rather than groups, suggesting that you donít need a host of big business backing in order to finance and start up your own personal endeavours.
So how exactly should you go about acquiring the necessary funds to achieve this? Fret no more as the guide below should detail you in with all the best ways to garner the start up funds you need, so that you can make your business dreams a reality in 2014.
A relatively new form of funding that samples old school ideas of loans is peer-peer finance, which enables people to acquire loans far easier and at lower costs than those offered by banks.
2013 was a significant year for online peer-peer sites; with over half a billion pounds being provided to small businesses alone in the calendar year. Banks have been highly cautious in recent times when lending to small businesses, and despite the Bank of England announcing a refocus of their Funding for Lending scheme towards small business start ups, it is nevertheless still difficult to attain the level of money needed to make a meaningful opening to a business venture.
The interest rates attached to loans on prominent sites such as CrowdCube and Ratesetter are superior to those offered by banks, and are far easier to acquire. Many enable small businesses to instantly obtain stakeholders as they grant people the ability to invest in small businesses through an equity stake. This allows the small business to acquire the money it requires, whilst also benefitting the investor who is standing to receive a sizeable pay-off should your business take off.
The funding usually takes the form of micro-loans, where your total financing is comprised of minute loans to different investors. Nevertheless, you will still be able to receive the full amount of money you require, simply in smaller loans.
It is worth looking at all of the Crowdfunding sites on the internet and evaluating the different policies they have towards business lending, as you may be positively surprised by what they might be able to do for you.
See if youíre entitled to a government grant
A high profiled scheme by the government has been its Start up Loans scheme that is now universally available to aspiring small businesses to assist them with their start ups.
Essentially, if you feel as if you have a business plan that is promising and inclined to be successful, then you should apply to the government and ask them for a grant through the scheme. Depending on how they perceive your application, you could be entitled to as much as £25,000 from them in order to assist your start up. This funding will be given to you in the form of a loan, and you will have to repay the full amount over a 5 year period, with an interest rate of around 6%. You will also be given key advice and business help through the scheme, making it an excellent place to start if you are an aspiring businessman.
It might also be worth applying for funding through the Seed Enterprise Investment Scheme, though your business must have been trading for a period of lower than 2 years in order to be entitled to money through. If you are able to qualify for the scheme, then you might be able to receive tax exemptions on any investor funding, making it far simpler to acquire backing than it would be otherwise.
Plan for low spending
Keeping your start up costs to a minimum should be regarded as essential when determining how much money you will require to open business, as this will influence significant factors such as profit margins and company debt in the future.
This is not suggesting that you completely water down your original vision of your business venture, but rather just to be practical in the short term so that you can lay solid foundations for expansion when it is more attainable.
At the end of the day, the lower the amount you spend on creating and then sustaining your business, the less debt you will have to rack up, and thus you will have more money in the future to allocate to expansion or to use as profit.
“It can be easy to lose sight of some of the simpler ways of helping your business,” says Paul Shephard, director of business and private banking at Clydesdale and Yorkshire banks. “But regularly reviewing costs should be top of the to-do list.”
Some good things to do would be to base your office in a respectable, but cheaper area, rather than in a city centre where costs will often be higher. Look around your area and look if there are any areas that are perceived as up and coming, because you might be able to acquire a cheap deal there that might have a number of positive implications in the future.
By doing this, you ensure that if your business kicks off that you have the flexibility to scale up in accordance to your finances, whilst you original calculations should mean you are prepared if anything negative happens with business in the near future.
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