The key enabler to success for many start-ups and small businesses is securing funding. However, even with the growing support and investment for entrepreneurs around the world, many businesses still struggle when it comes to preparing to apply for funding. Read on to discover our top tips for getting start-up and small business funding.
1. Build your Network
Get out there and build your network. This is invaluable for not only building your business, but also for getting support and information from other businesses, including finding out how they went about raising finance. It’s likely something will be mentioned that you haven’t yet considered but would be useful to demonstrate in your funding application.
2. Start your Funding Application Before you Spend Money
It would be risky to embark on your start-up idea and begin spending money if you did not have a very clear understanding of how to pay for things. It’s particularly important not to take on any leases or contracts if you can't commit to the full term of these. Showing business funding providers that your company is already financially stable will give them confidence that your future profitability is likely, and that their investment won’t go to waste.
3. Prove your Business Idea is Viable
Prepare cash flows and forecasts to give crucial insight into how you will manage your business growth plans. This includes reports on how many staff you will need and how you are going to reach your expected sales targets. You may want to prepare several forecasts that cover the best-case scenario, worst-case scenario, and expected results. This demonstrates that you have thoroughly considered the risks associated with your business and have an idea of what your contingency plans are.
4. Put your Money Where your Mouth is
Funding providers are always looking for the applicant to be taking some of the financial risk themselves. Therefore, it’s important to have contributed some of your own finances to show your belief and commitment to the business. The more faith you have in your business, the more likely it is to succeed.
5. Be Detailed in your Application
Don’t leave anything to chance by making sure you give potential investors all the information they need to convince them to invest. This includes quotes for all your outgoings which will show your budget and forecasts are accurate, as well as a clear explanation of what area of your company you require business funding for. Prove there is a direct need for your business by providing evidence that its service or products are not currently available. You should also use specific and un-ambiguous language in your application. For example, mentioning the exact age range of your target audience and a timeframe related to all your business activities. Avoid generic terminology such as “miscellaneous costs”.
6. Make the Job Easier with Software Tools
Utilising cloud accounting software gives you up-to-date data at your fingertips to show investors. Indeed, tools such as Spotlight Reporting allow you to tweak forecasts and scenarios to reflect different outcomes. For example, it will give you an indication of what will happen if a customer takes 60 days to pay instead of 30, or the impact of increasing income from quarter two onwards.
7. Don’t go it Alone
It is also best to involve an accounting professional when applying for start-up or small business funding rather than going through the process completely by yourself. The right professional will have experience in business funding applications, will know what the funding provider is looking for, and how best to present the information. Furthermore, from the funding providers perspective, having a qualified accountant on board strengthens the viability of the business idea.
Get Help with your Small Business Funding Application
At Hysons, Chartered Accountants in Andover, we have the expertise and tools to prove the viability of your business or start-up and help you secure financial support. Our team of specialist accounting consultants will make sure your data and reporting are correct and that you have everything you need when applying for business funding. We understand that this process is tough, so we are determined and committed to assisting you in your efforts to secure the funding that makes your business flourish. Contact us today to discuss how we can help with your small business funding drive.