One of the most difficult things in business is coming up with an idea for products or services that you know people want. With so much competition out there, the market is saturated with companies and you need to be offering something a little different. But even if you do find a unique selling point and have an idea that you know is likely to take off, that’s just the start. The practicalities of getting set up can be trickier than you’d ever imagined as a first time entrepreneur, and on of the biggest obstacles to overcome is how to finance everything. The old saying is true- in business, you need to spend money to make money. You need to hire a premises to work from, then (depending on the size of the company) you may need to hire staff members- recruiting costs can be more than you might expect, then you have interviewing and training. You will need equipment such as computers, software, phones, printers and everything else. Then you need to pay a manufacturer or supplier to send your stock, a warehouse to store them, a delivery company to deliver them and much more. You need to consider insurances, maintenance costs, marketing and promotion. There are so many costs to think about it can really catch out a first time entrepreneur. If this is your first venture then you won’t have lots of cash from previous businesses so it can be extra difficult to get it off the ground. Even if you’re only going to have a small setup, perhaps just you or you and one or two staff members, you will need to think about how you’re going to finance things. Here are some ideas.

 

 

Use personal savings

If you know you want to set up a business in the future, then a smart move is to start saving money. Ideally, you could do this while working in a business related role for another company. That way you can build your skills and gain experience while saving for your future business. Funding your company with personal savings is a great way to go about things, otherwise could you consider selling things like stocks, shares and family heirlooms to raise the cash? It would mean that you don’t start off with any debt or interest to be paid, so you notice the effects of your profits right away. If for any reason you do end up failing, you don’t wind up with a failed company plus tons of debt. Of course, hopefully that doesn’t happen and you put in enough research and planning to make your business a success. But worse case scenario, you’re not dealing with a failure plus debt and creditors chasing you. Work out how much money you will need to get your business started, and then work towards achieving this goal before taking the plunge.

 

Find a good business loan

If you’re unable to save (or unable to save enough in time for when you open) then business loans are another option. Just be sure to do plenty of research, look at loans online to find best rates, you want to be paying the lowest interest possible. Some cards and loans may even have an interest free period which allows you to get yourself established and hopefully making money before you have to start paying interest. The benefits to business loans are as long as you have a good credit score then you’re likely to be accepted, and can have access to money right away. On the downside, you are starting out business in the red, and will need to pay back the money you’ve borrowed before. If business doesn’t take off as quickly as expected then this can allow you to fall into debt. Be sure to work out your finances carefully, you’ll need to be careful that you’re not overspending and know that you can afford to keep things going without racking up debt if you don’t make lots of sales right away. Some personal savings to use as a buffer here could be a wise move. That way you have something to fall back on, instead of tripping at the first hurdle. You could use credit cards, a personal loan, a business loan, borrow against your home or any other option that’s available to you.

 

Search for investors

Finally, if you know you have an especially unique, interesting or investable type of business then it could be worth searching for investors. The trouble here is they’re in high demand so there’s lots of competition, however if you are lucky enough to secure one then it could mean fantastic things for your company. Often, investors also act as mentors and can give you invaluable guidance and advice which will help your company to succeed. After all, your business doing well also benefits them since they will be getting shares in your profits. Work out exactly how much of your business you’re willing to give away in return for this kind of help, as well as a cash injection. In some cases, you may be able to buy back your shares later down the line so these are all things to look into. Just be sure you have a good pitch, and you have your facts and figures straight when you go to speak to them. They will want to know exactly how much you’ve earned so far, your ideas, projections, the debt you have and everything else. If you have a business that’s of interest to them, getting an investor on board could mean huge things for your company. Investors are often business owners themselves that have achieved massive successes from their ventures. So have plenty of advice and can point you in the right direction. As a first time entrepreneur, this kind of advice is absolutely invaluable.

 

Raising the money to start your first business is always going to be tricky. These are just three ways you could get together the capital you need to get your venture off the ground.