In an ideal world, you should start your own business without any third party funding. However, depending on the size and nature of the business this is not always possible and serious investment may be required to get your business from an idea to a money making entity. Equipment, premises, staff, insurance, licenses etc. all come at a cost. You will need to find some serious financial backing to get your business off the ground.
You should begin with a comprehensive business plan which will outline the exact nature of your business and how you propose to make money. You don’t have a viable business if you are not making money. For many a business could start off simply as a hobby or a side-line that you do in your spare time or at weekends. As the business grows, the financial requirements of your business grow too.
Your start up budget will include the following:
- Premisies deposit and rent
- Office equipment/furniture/supplies
- Production equipment if you are manufacturing a product
- Legal fees
- Licences if required
- Business registration and copyright fees.
- Deposits for utilities such as electricity, phone, broadband etc.
- Advertising and promotion
- Website Development fees
- Contingency – always have a fallback plan.
It’s easier to get financing the first time round so make sure you cover everything from the outset as investors may not be to eager to reinvest additional funds a few months after startup when you have spent their entire investment. This is where contingency becomes important. You need to account for the unexpected.
There are lots of different ways for you to finance your new business.
Borrow the money – the options:
1. Use your own savings: If you have the money yourself, then you can finance the new business. This is a quick and easy approach if you have the finances in place. However, you need to make sure that you separate business finances from your own personal finances. You still need to be able to live and cover your everyday expenses.
2. Borrow from friends and relatives: If your friends or relatives believe in your business idea and have some spare cash to invest, then you could approach them for either a loan or offer them a share in the business. You should be very careful with this approach as friends can be soon lost over a bad business decision. Even worse, your family will always be your family so you might want to avoid alienating them over poor business decisions. Thread carefully!
3. Borrow from the bank or credit union: This is the obvious approach. Many banks and credit unions have financing deals specifically for new business. Set up a meeting with your bank manager or credit union to discuss your options. For this approach, you will need to have a formal business plan. Creating a business plan is a good idea no matter how you source finance for your new venture as you can set up benchmarks and targets for the business as it develops. This will allow you to easily monitor how the business is going by keeping an eye on your business objectives and resulting revenue. As part of the business plan, you should incorporate a five or ten year plan for the business as it is really important that you can predict how your business will grow. You don’t have a viable business if it is not making money.
4. Find Investors: Find an entrepreneur with some spare cash to invest in your business. This will require offering up a share or stake in the business. It’s important to remember that without the necessary financial investment you won’t have a business so don’t be too precious about it.
5. Contact the Small Firms Association: The Small Firms Association (SFA) is the national organisation exclusively representing the needs of small enterprises in Ireland. The SFA provides economic, commercial, employee relations and social affairs advice and assistance.
6. Contact Enterprise Ireland: Enterprise Ireland is the government agency responsible for the development and promotion of the indigenous business sector. Enterprise Ireland can provide new business with the support required when starting out.
If you are starting a business and need a business premises, then check out MyHome.ie/commercial for a range of offices, retail units and other commercial properties for sale, to lease and to let.