Starting a brand new business requires having plenty of initial capital to get it off the ground and ensure it stays afloat. According to research, around 80% of businesses fail in the first 18 months, which makes surviving the first year all the more important to be successful. Having enough money in the company and a smooth cash flow process is essential, and there a number of ways to fund your start-up’s first year.
- Bank Loans
Bank loans are the first place many entrepreneurs will go when looking to secure enough starting capital for their start-up. To do this you will need a good credit history, excellent business plan and the confidence that you’ll be making enough profit in the near future to pay off the loan and its interest. There are specific business loans available from certain lenders that usually offer better terms and rates than personal ones.
- Venture Capital
There are professional investors around who will invest venture capital in start-ups that they believe have long-term growth potential. The venture capitalists then get a say in company decisions, and you will need to demonstrate a good business plan with the potential to grow in order to secure such funding.
Crowdfunding is on the rise, with the practice helping to start thousands of successful businesses. If you’ve got a great business idea then people may be willing to put their own money towards making it a reality, but you must offer them something in return.
- Forex Trading
Somewhat of a riskier way to fund your first year, trading forex through Oanda can help increase profits and create that little extra in case of an emergency. This can be done by either assigning someone in house to take charge of it or outsourcing to a forex broker.
- Invoice Finance
Invoice financing is where a business receives the amount owed from clients upfront through a financial company, at a small discount. The invoice financing company then receives the invoice when paid, which helps create a smooth cash flow and helps your company grow.
- Friends and Family
Often a last ditch effort, depending on how much money your start-up requires, asking friends and family is an idea. If you’re serious about the chances of your business being a success, then they should be happy to help out. That is unless you need funding in the millions. These methods will all help fund your start-up in its first year.