Starting up a new business, especially for the first time, is often both daunting and exciting in equal measure. You have to wear many hats as a business owner and often you will need to raise capital of some kind in order to kick-start your venture.
At Tower we have seen and supported many applications for funding and in order to help others when starting out and ensure a greater chance of success, we have compiled some tips and pointers to help along your journey.
A business plan is essential, if you don’t have a plan, you just have an idea or a dream. No matter how good that idea is, unless you have a firm plan, ideally covering at least the first 12 months, you will struggle for any potential lenders/investors to take you seriously.
There are plenty of templates available online and good resources available if you don’t know where to begin with writing one. It’s sensible to review and update your plan every year as your goals and targets change.
They do not need to be set in stone, however forecasting on a regular basis is important so you can stay on top of your cash flow. Cash flow really is king so it’s essential that you try and plan for any peaks or troughs, not only that but this will help you demonstrate affordability for the finance you seek.
Personal Credit Profile:-
A new business naturally has no trading history or financials, which is why it’s generally harder to find funding support. As a result, there is an increased focus on your credit history as well as any co-directors or partners that you have.
It’s imperative that you review your credit history if you haven’t already, there are plenty of free ways to do this, and do so once a month as it’s updated. It’s a great way to track when and who is credit searching you (permission is always required to do so) and what information is available to them.
Being on the Electoral roll, keeping up with your commitments (credit cards, mortgage etc.) and limiting the number of searches conducted, can all potentially help when you apply for funding in the future.
Personal Bank Statements:-
Similar to the above – make sure that all is in order as best you can. Missed or returned direct debt payments are frowned upon and you need to avoid these where possible. Most finance companies will want to review your personal bank statement history for the previous 3 months.
How much capital do you require and what for:-
It might sound obvious, but you need to have a precise picture in terms of how much funding you need and what it will be used for. Broad numbers will not be ideal, be specific as possible and explain how you are going to use the money, over what time frame and how it will impact the business.
All in all, you need to be prepared and willing to put the ground work in before you approach anyone for finance. It will save a lot of time in the long-run and make any progress much smoother.
We have the expertise and the willingness to help guide you through the whole process, from start to finish and beyond.
Tower Leasing Limited