With around 600,000 new businesses launching each year in the UK, there are a lot of people who want to become their own bosses and make money.
However, many of these new businesses won’t make it past the first year, not always because of a bad idea, but often because of a lack of financial knowledge.
The more a new business owner knows about finance and how to run a business, the more chance there is of success.
Let us take a look at the financial considerations when setting up a business.
Getting the Finance Right First
Before you start your new business, you must think about how it will be funded and how you can make money. There will be overheads that will need to be addressed, and perhaps not a lot of income at first.
If you don’t feel confident about the financial aspect, you can hire accountants in Ipswich and around the country. They will be able to guide you and tell you what your responsibilities are.
They will also be able to tell you what items can be declared for tax purposes and what discounts you might be able to get. They may also be able to suggest grants or other financial incentives that can help you and your company early on.
By far their biggest help will come from understanding your tax obligations and helping you stay within the law.
One of the first things to consider when starting a new business is funding. You will need this to get all the things you need to get started and continue until you can start to make money. Even an online business may need some initial funding for advertising, buying technology, and creating and running a website.
Securing the funding you need may be harder than you think. You might not be able to secure a loan from the bank which means you will need to seek out other options.
- Crowdfunding is one way that you can get the funding you need. By asking for funds from people you can then offer them something in return. This could be a preview of the products or becoming one of the first to receive the new product once it is launched.
- Looking for investors is another way that you can obtain funding for your company. Many investors will want to see a business plan along with a business model so they can see how your business will work and generate money. You can also find certain investors that invest in start-up companies. You should consider that investors will usually want something in return such as a share of the profits.
- Friends and family are other avenues for funding your business. One of the benefits of this is that they will likely already know about your business idea and have a good understanding. There is, however, a potential downside and that is if things go wrong, your relationship with them may be affected.
Many companies use some of their funding to create a marketing campaign. This helps them to get their company brand out to people and hopefully generate sales or leads. However, there are other options that you can use which won’t cost any additional money.
- Social media is a great way to expose people to your brand. Even people that are not following you will see it when you post something. This can be a great way to gain customers and get people to visit your website.
- Your website can be a great marketing tool providing you use the right processes. Learning about SEO (Search Engine Optimisation) is key to helping people find your website and check it out. Here you can show people your products and help them easily make a purchase. With the correct SEO techniques, you can draw people to your site by ranking highly on search results and SEO consultants can support you with that.
- Cross promotion can be used if you know of another company that has products that will complement your own. You can share on each other’s social media and websites so that you can get access to a wider audience. You may find that customers of their company will try your products and vice versa.
When you are setting up your new business, finances can be a headache, especially if you are finding it difficult to secure funding. However, by looking at all the avenues open to you, it will be easier to find the funding you need and grow your business.