Are You Looking For Money? Part II

We all need money to pay for the necessities of life and a new business is no different, as it needs money to finance start-up and running costs.

Each business has its own way of financing its activities to make sure it has the money needed to manage in good times and bad.

The type of finance available usually involves personal money and savings, borrowing from family and friends, bank loans and overdraft facilities and grants or money from external investors.

In reality, most businesses use a mix of these sources of finance to get started depending on the particular demands it faces.

The best way to identify the amount of money needed is by developing a business plan, as it will identify the costs and estimated sales of the business in its early years.

Once the amount of money needed to get the business started is known, it is useful to consider each type of finance to see what suits best.

First, see how much money you can invest personally, not least because investing your own money will give confidence to others.

Second, people often borrow from family and friends on an informal basis, whereas it may be better to formalise arrangements to avoid conflict as the business grows.

Third, banks will usually offer overdrafts, loans and other types of finance depending on the needs of the business and the length of time the money is needed.

Fourth, business grants are available from a range of organisations including the European Union, government departments and some charities, although they can be time consuming and difficult to get.

Fifth, external investors include business angels, venture capitalists and more recently crowdfunding; each of which need to be explored to see what is best for the business.

These are some of the more common sources of finance but by no means an exhaustive list, so once you know the financial needs of the business check out what suits you best.

SO, if you are starting a business the good news is that money is available but you will need to clear about how much you want, why you want it and, most importantly, how you will pay it back.

What do you think? Are you looking for money? Get in touch, we would love to hear your views contact Nick on 028 8224 9494 or via Twitter @nick_oec.