Running a business can become an expensive task, and there are instances when you might need to look for further investment. This could be for growing your business, acquiring another company that compliments yours or helping with the development of future products and services. It is crucial that before you embark on any growth strategy, you speak with a Tewkesbury Business Advisory company such as Randall and Payne to ensure that it is appropriate for your business at this point in time. If you decide to go ahead, there are several ways that you can look for financing.
Self-financed – if you are looking to start a business from scratch, you might be looking at self-financing this. It can be challenging to get financing for a start-up as banks won’t want to lend on a business that has no trading history, and it can also be difficult to get investors on board. If you are looking to grow your business, you might not want to self-fund this as the other options mentioned below might be better in this situation.
Bank Loan – bank loans can be difficult to get on businesses unless you can prove that you will be able to comfortably pay back the money within the given time period. It is often used when a company is looking to grow or buy another company. This will require lots of meetings with the bank and a detailed business plan with projections and forecasts to be able to meet the bank’s criteria and to prove to them that the growth or acquisition is a safe and prosperous one.
Investors – if you have ever watched Dragon’s Den, you will be familiar with the idea of investors giving you money in return for equity in your business. This needs to be thought through properly and discussed with your accountant to ensure that you are not giving away too much equity in your company. It can be helpful to have the support of another business professional, but in some cases, you might find a silent partner who will fund your requirements but will not get involved in the day to day running of the company. Again you will need a robust business plan and goals and projections for the next few years.
There are other options available such as grants and crowdfunding. These again need to be thought about in terms of ensuring that your company meets the criteria for any grants and that you have thought about equity shares that you may be giving away as a part of a crowd funding agreement. It is essential that you explore all the options available to you and pick the best one for you and your business circumstances.