Funding for Business Start-Ups

Starting a Business on a Shoe String

Despite the doom and gloom we are constantly subjected to by much of the media there appears to be an air of enthusiasm for starting a new business at the moment.  It seems that many people are not prepared to wait until better economic times, they have an idea and they want to get going.  

How easy is it to start a business? Some will tell you that it’s never been harder than today with so many people competing for the same money in the middle of an economic slowdown.  The truth is I don’t know when it is a good time, I’ve been specialising in working with start-up businesses for fourteen years and I’ve seen hundreds start and succeed and a similar number fail.

It is possible to start a business with only a Smart phone and a business card.  With an attitude to succeed it can be done but it will also take a great deal of personal commitment, drive and focus, all things that are needed by anyone thinking of starting a business but in far larger quantities.

For many people a lack of finance is the biggest hurdle.  The belief is that banks do not lend to start-up businesses and if you are successful the interest rates and the pressure to repay can be like a millstone around the neck.

Others will grow their business by the bootstraps, that’s to say that you earn some money and pump it straight back into the business.  This works but it can be a long time before the business really gets going and generally there is a limit to how long anyone can live like this.  

My question is how does this lack of finance for a new business affect aspirations? If a new business owner had access to £5-10,000 with low interest, to finance a website that really works or to invest in design so that they have a brand that makes an impact, what difference would that make?  If they had money to invest in learning new skills, to buy equipment and to have working capital to ease the cash flow would they be encouraged to think bigger?  

I’ve tested this idea with one of my groups and the answer was ‘yes’.  If the right person is driving the ideas forward, if research is carried out to show that the idea is potentially viable, if there are clear objectives, a marketing strategy, and if the numbers add up, it can all become reality.

Is it time for the Government at any level to speculate, to take the risk on these new businesses? Many of them are high risk and the money may not be repaid, but if lessons are learnt by the business owner and applied to another new venture could we not write it off as training!