What sort of funding will I need?Start-up costs are a priority for the majority of new businesses. The sorts of resources that you may need will vary, but would generally be required for some or all of the following: - equipment: anything from a laptop computer to heavy plant or industrial standard tools and machinery;
- accommodation: renting or buying a work place;
- furnishing and decoration;
- utilities: heating, lighting, water;
- training: additional course(s) to give you the skills and knowledge you need;
- infrastructure: setting up systems and processes to move the business forward;
- marketing: promoting and advertising;
- administrative costs: phone calls, postage;
- employing staff;
- general development: you may need time and/or money to do further research or develop products/services.
The necessity for extra funding does not stop when the business is up and running. You may need to expand your activities, but lack the capital needed to do so. back to top Are there any other costs?It is recommended that you obtain various types of insurance: buildings and contents, professional indemnity to safeguard you against legal action, health cover in case you are ill and cannot work, public liability if your premises are accessible to people not connected with the business. You also need to think about setting up a private pension. back to top Where can I do research and get advice?Business Link has links and signposts to all types of funding opportunities, regionally, nationally and across Europe. It includes a facility where you can type in details of your background and business proposals and generate lists of possible sources of support. back to top What kinds of funding are there?Funding comes in four main types: - you have to pay back, often with interest i.e. a loan;
- equity that is put into your firm and may give the investor a say in the way it is run (this includes sponsorship);
- matched funding, where another agency supplies part of the cash needed (typically half of the amount) and you have to obtain the rest;
- grants, awards and scholarships that do not have to be repaid.
back to top Where are the main sources of funding?Many high street banks will consider lending money for business purposes. Grants, awards and matched funding can be accessed from local, regional and national agencies that back enterprise. Contact your local enterprise agency (details available from the National Federation of Enterprise Agencies) to see what types of funding they have. Charities provide grants, awards and matched funding. They may have a specific remit for business start-ups, like the Prince's Trust, or this may form just a part of their brief. Some business firms and professional bodies offer grants and sponsorships. Business angels and venture capitalists are constantly on the lookout for potentially large-scale commercial opportunities in which to invest. Private loans and investments from friends and family are likely to be made with minimal interest rates, but friends and family may not provide the on-going mentoring and support available from other sorts of funders. If you go down this route, get a legal contract drawn up in case disputes arise later. back to top How do I apply for funding?Almost any organisation offering funding will want proof that you will use the money wisely. They will want to see your business plan and discuss it in detail before handing over any money. Unsuccessful applicants who nearly make the grade may be encouraged to re-apply when they have done more research or acquired additional evidence. You may occasionally be asked to enter some form of competition or selection process. back to top Are there strings attached?Most providers like to see evidence of personal investment as this shows your commitment. Funders may specify certain uses for the money such as projects with a social enterprise bias. Many lenders and investors monitor how you use the money, perhaps by setting targets and outcomes. Some funding is staggered and later payments are dependent on how well you have utilised the first tranche of cash.
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