Did you know that 56% of new businesses will collapse within their first three years? And, that of the 44% which remain, over half of these will fail within the following 2 years? These are worrying statistics for anyone who is looking to commence their own start-up and as such it is vital that the reasons behind the failures of others are looked at carefully, and more importantly, avoided.
The majority of businesses which fail, do so because of either financial mismanagement or a lack of funding to keep the business going or seek growth when the time is right. In order to avoid these problems it is vital that you have sufficient funding in place for your new business, and here is where to get it.
Banks have been loaning money to new businesses for a very long time and they are still one of the most tried and trusted methods of funding a new enterprise. Bank loans will have very reasonable terms regarding repayment structure and they will also assist you in your business in any way that they can. It is worth remembering that a bank wants your business to succeed, not only will it mean that they get their money back, but also that you are more likely to keep your business with them in the future.
Ever since the booming successes of start-ups such as Uber and Facebook, there are more and more investors looking to plough their money into exciting start-ups. These people are referred to as angel investors and you can use their money to propel yourself to success. Often you will need to pitch your idea to them and negotiate the terms of their investment, this could mean giving a small share of your business away for a helpful cash injection.
Governments love a successful start-up as they can have a positive effect on the economy as a whole, creating new jobs and adding to created revenue. For this reason there are a lot of grants which you could tap into that have been set up by government agencies to support you and your start up. The figures which you can get your hands on are not enough to complete your funding goals but they will boost your financial strength and give you a higher chance of success.
There is nothing wrong with investing your own cash when it comes to setting up a business although if you do, you will need to consider your personal and business finances as two separate entities. The reason for this is because it can become highly confusing and could land you in hot water. If the business does run into difficulty, you should not have to pay for this out of your own pocket.
So there you have it, four great ways which mean that you can go and get the funding which you need, for that million dollar idea of yours.