Looking to finance your business? Get the help you need
Posted on in Creative News
Craft, Hobby + Stitch international is the UK's largest show for creative businesses, so if you are thinking of turning your hobby into a business it could be the perfect place to find out all you need to know...
If you are a new start-up business attending Craft, Hobby + Stitch International this autumn, you'll likely be focusing your attention on the new trends, making contacts and researching costs to find out if your new venture is going to be feasible. However, you should also seize the opportunity at the show to seek all the free support and advice you can by attending seminars, workshops and the Business Advice Centre, powered by ActSmart.
ActSmart are regularly contacted by people who are setting up their own creative businesses, seeking advice and support.
If you are thinking of starting your own specialist creative business, then ActSmart should be your first port of call. ActSmart are working alongside CHSI (by powering the Business Advice Centre) to provide you with valuable advice and support through the entire life of your business, delivering essential services, business support, consumer promotion and development opportunities to the creative industry.
Over the next few weeks ActSmart will be providing an introduction to different topics which can help business at all stages of their life-cycle. From start-ups to fully fledged brands, we will be providing guidance on everything from choosing your company name to running a successful loyalty scheme!
This week, we take a look at how you can finance your new business venture.
Funding your new business
When you start a business, there is usually a period where you're investing lots of time, effort and money before you start to make a profit. It's important to research your market to make sure your customers will really pay for your product or service before you do this.
Once you're confident that they will, you should explore different sources of funding to help with the costs of starting up your business.
Personal savings
One of the most obvious ways to fund a business is to use personal savings. The benefits of this approach are that if you have the savings then the money is easily accessible, you don't rack up any debt and you are only accountable to yourself for the success of the business once you invest the money. The down side is that if the business is not a success you may not have any savings left to fall back on - so there is some risk involved.
Apply for a business loan
We know it isn't always feasible to start a business with just your own personal savings, so sometimes third party funding is needed. You can apply for a business loan specifically to support your business in the start-up phase. A small business loan can go up to around £25,000 depending on what you need to get you off the ground. A loan could help you to buy machinery, find premises or just cover the costs of creating a first batch of your product.
You need to ensure you understand the terms of your loan and be sure that you have a plan for paying the money back - including knowing that the interest accrued is going to manageable.
Alternative funding
For alternatives to the high street banks for you could consider raising funding through alternative finance providers such as crowd funding platforms.
In recent years, crowdfunding has become an incredibly popular way to cover these expenses whilst promoting your product to hundreds or thousands of potential investors.
The idea is that you can post pictures and video of your prototype or finished product online, as well as some detailed information about what it is and why it's great, with the intention of attracting customers and backers to fund your project.
Many successful products have started as Kickstarter or Crowdfunder projects, with some great ideas "going viral" and receiving many times the amount of funding that they originally asked for. What could be better than a brand new business, already with an enormous and engaged customer base who is throwing money at them?
By the same token, a lot of crowdfunding projects don't even come close to achieving their funding goal and this is great too! If your crowdfunding project doesn't attract any attention or backers then there's a good chance that the product's not right or that there's no market for it, in which case you know to go back to the drawing board before spending any more time or money on it.
Specialist finance for business
If you have been turned down for traditional loans and you need to seek an alternative, a specialist commercial finance professional will work with your business as an individual case, and look at the best way to source finance for YOU.
A specialist can assess your requirements and will work on your behalf to continue to manage the process, up to the point of completion. They work with an extensive and trusted panel of lenders including high street banks and specialist finance houses.
They are able to access decision makers on your behalf and knowing how to present your proposal ensures that your case will receive the high level consideration it deserves.
Click here to take part in our short, six question SME Funding Survey.
Visit the Business Advice Centre
For more help and guidance on any aspect of your business, don't forget to visit the Business Advice Centre at Craft, Hobby + Stitch this Autumn on stand B38.