Whether you’re a one-man band or an established local business such as Atlas Ceramics who are one of the UK’s leading ceramics providers. There are some great tips to be found on growing your business – everything from product innovation, partnerships and expanding your market to search engine optimisation and the mastering of paid advertising platforms.
The problem is, they all require funding– and when you’re starting up or looking to expand, money is often difficult to funnel into growth. This is especially the case if you’ve previously run into financial issues like bankruptcy or court action.
We’ll take a look at a number of alternative ways that you can explore to find that all important cash that’s needed to put your growth plans in action.
You can be forgiven if you’re not fully familiar with crowdfunding – it’s a relative new-comer to the business finance marketplace, but it looks like it’s here to stay.
Essentially, rather than making your business look appealing to one investor or finance organisation, you’re going to make your business proposition look attractive to a greater number of smaller more casual investors – hence, ‘crowd’.
And when we say small, we potentially mean really small. Crowdfunding often means people can support your business with tiny amount, £5 or £10 – although many will choose to offer more. In return, you might offer a variety of things on a sliding scale.
For example; you’re putting an innovative new low cost product out to market and hoping to raise £100,000 to do so. A £5 contribution might be rewarded with a personal letter of thanks and a mention on your website and social media. A £50 contribution might get that plus a pre-release version of the product you’re developing – and a £5,000 contribution might get you a small stake in the business or a product line named after you!
The possibilities are only limited by your imagination – and some extremely successful businesses have funded their growth in exactly this way – from smartwatches and 3D printers to innovative music services and even movies.
An angel investor is someone who’s looking for lively businesses with great ideas but a lack of capital – with a view to funding your development or growth.
Now, they’re not charities! Angel investors will be looking for a portion of your business in return – or at the very least, a guaranteed return on the money they inject – that said, you’re likely to get more than money from someone who’s looking to invest.
Owing to their new stake in the business, angel investors will want to support you when it comes to the growth you’re seeking. Many will come with invaluable contacts and industry experience that would otherwise be out of your reach. You’re even more likely to find this type of value if you look at accessing a funds that are pooled by numerous angel investors – with you able to pull out the advice and experience you need.
You’re going to want to have an extremely detailed plan in place before you approach an investor – although your ideas and personality stand to carry you a long way, there are some business fundamentals that they’ll want to see in place before they put their money on the table.
An even more recent approach to financing your business than crowdfunding, accelerators take you and your ideas – then turbocharge them with investment and a series of development tools.
It’s fair to imagine taking part in an accelerator programme as something of a ‘business bootcamp’ – with a growth goal and deadline agreed upon successful application to the program. When the deadline date arrives, you’d normally be expected to take part in a demo day, where your newly polished brand and product are presented to potential investors.
Accelerator programs will often see a chunk of capital invested into your business to aid the planned growth – with either repayment terms or distribution of company shares planned to repay that investment.
There are a lot of criteria to meet before you’re accepted onto an accelerator program, not least the fact that you’re expected to have a reasonable sized team, with the attitude that one person alone will not be able to manage the workload and ensuing growth. The acceptance rates onto programs are low, but if you’ve got a great product and a will to succeed then you’re in with a chance…
Grants and government loans
Now, if you’re expecting to qualify for a grant or government loan off-the-cuff you’re probably going to be disappointed – but if you fit into a particular category of business owner, area or industry then you might find a grant or loan to be perfect.
What that particular industry, geographical area or demographic will be depends entirely on the types of business that your local or national government are hoping bolster – but you’d be amazed at quite how many areas of interest a government can have.
For example, in 2013 it was announced that 1/3rd of government subcontracts would be offered to small businesses – and while they’re not quite at that level yet, there are a number of incentives and schemes set up to help you apply to work in partnership with a variety of government departments.
Whether you’re looking to overhaul your business premises, launch a new product or take on new staff members, there are schemes that could support you. Talking to your local government business advisor is a good first step – even if your plans are just at outline stage for now.
You’ll be expected to put together business plans and projections at incredible depth – so be warned, when you’re applying for government money, there’s no quick decisions or 1 page applications! The money you’re applying for is likely to take a while to hit your account too, as there’s a lot of red tape to be worked through.
That said, if you’re approved, you’re likely to get money that doesn’t have to be repaid – or is repaid interest free. It’s possible that you’ll need to check in with a business mentor as your plans develop – but if that’s the key to the growth of your business, it’s likely to be a welcome inconvenience.