Tips for funding your small business

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There are many reasons why a small business will require funding, with expansion being just one of them. It is important to obtain the most suitable funding for your company, so that it meets the company’s requirements and is cost effective. There are traditional routes, like your local bank, or you may prefer to opt for an alternative source of funding, like crowd funding. There are also a number of government backed options that may be suitable.

How to secure business funding

Whatever the source of funding, you will have to produce a solid business plan. This should demonstrate that your company is a profitable concern, and that you have a market for your product or service. You must be able to demonstrate that you can make a profit on the merchandise, so that the lender is willing to invest in your business.

Your target audience

Proving to the potential investor that you have a solid target market for your goods can only encourage willingness to invest. If you have a business in an area with high potential for growth, you will be more likely to succeed in your bid for funding.

Make sure you outline your unique selling point, asking yourself what you have that your competitors don’t. Providing all this information will prove to the lender that you have conducted research and have sound knowledge of your intended market.

Potential for profit

Of course, all lenders want to make a decent return on any investment, and your company won’t be an exception. No matter how exciting you think your product is, you will struggle to secure funding unless you can prove that it will sell and make a decent profit. Demonstrate to the lender that you will be able to make a reasonable profit in a relatively short period. You have more chance of being granted finance if you can show that the investor will receive a high return in a fairly short period of time.

Believe in the venture

You will be expected to demonstrate that you have invested some finance into the business. After all, if you are unwilling to risk your own money, why would an investor consider it? Although having integrity, commitment and determination are all good business traits, an investor would expect to see that you have made an investment in your own company.

Producing a sound business plan is crucial when applying for finance from any source, which is why you may want to consider a management accounting service. For no obligation advice, why not call us to arrange an informal chat?