Whether you are expanding your office space, taking on more staff, securing new equipment or starting up projects, the costs associated with starting and growing a business can seem never ending.
“Anything that is not growing is dying”
Growth is a natural goal for most businesses, and the more funding a business has access to, the easier it becomes for the life of that business to grow and develop without the restrictions that come with a lack of funds. Funding opens up doors for new ideas to flourish and highlights previously unseen options that could be the key to future success. This natural need for growth is what drives most small business owners to continually seek out new income streams and find new ways to invest even more into their business.
Thankfully, some new and inventive ways of raising money are making waves online. There is plenty of information surfacing on the web to help you learn about how to protect your business interests and then grow them through the world of venture capital and crowdfunding. There are also organisations like seedstars who operate entire competitions based on raising capital for startups. These organisations tend to have a large database of funders looking for projects that they can contribute towards, as well as a long list of startups looking for investors to believe in them.
Venture capital firms provide early-stage funding, but are typically looking to make relatively large investments and take a significant share of the company – often a controlling interest. Many of the successful entrepreneurs you see on TV started out in the same sort of situation that you find yourself in now– they had an idea, a dream and a hope that one day it would come true, but needed capital to make it a reality.
Funding experts suggest reaching out to people in your network to help get funding from those who were once in the same position. Talk to everyone you know until you get a positive response or a referral to someone who can actually help you.
According to Business dictionary, Venture capital funding is usually reserved for a new or growing business. It usually comes from venture capital firms that specialise in building high risk financial portfolios. With VC, the firm gives funding to the startup company in exchange for equity in the startup. This is most commonly found in high growth technology industries like biotech and software.
Crowdfunding can help you harness the power of the masses by offering shares or rewards in your business in exchange for cash using crowdfunding platforms such as Seedrs, Crowdbnk and Crowdcube. An additional benefit here is that it increases your market exposure and helps you gain additional customers. Sites like Indiegogo and Kickstarter are a great tool for enticing pools of potential investors to read up on your ideas and hopefully send money your way. All you need is a compelling plan or idea and you can begin to crowdfund your business today.
Quirky innovation works well among the crowdfunding folk, and they are always looking for the next big unexpected thing and generally more excited by the nature of your idea than its actual practical potential, so don’t be afraid to think outside the lines.
Government Funding is another way you can attempt to raise funding. Every year the UK government has a new annual budget for business grants which is larger or smaller dependant on which region your business is based. The incentive behind government funding it so bring jobs to areas that are deemed ‘deprived’ and therefore harnessing this type of funding id a lot harder if you live in a thriving bigger city. For example, funding id easier to get in Caerphilly than it is in Cardiff. However, if you meet all of the criteria for government funding and your business is ready to grow, it may be worth changing locations. Be prepared though, the government funding process can be lengthy and require a lot of information, forecasts and plans from you.
Bootstrapping is nothing new but is still the most common method of funding for a new business and probably the safest. You remain in full control of your business and grow it at a scale that suits you with any spare cash you have, whilst remaining in the safety blanket of a job that pays the bills. This , however, isn’t always such a good idea as your product/service could miss it’s chance in the world completely or a competitor could come along with a bigger budget and do a better job. Bootstrapping should be for those with a business idea that isn’t necessarily time sensitive to current market trends.
So, whether you are a start-up seeking initial seed capital or an operating small business looking for money to grow, you have to be flexible, remain positive, and stay vigilant in your efforts. But, there is always a way to get money and grow.
In business or considering starting up? Make sure you are aware of the right business insurance that is needed to protect you and your business…