How to Finance Your Small Business Start Up

It all starts with a great idea, an idea that has probably been in your mind for a long time. You have the product sorted out, how you are going to deliver your service, where you are going to set up your office and how you are going to market your new business. But the stumbling block always seems to be the finance to get you going.

Finding the finance to get a small business off the ground is a major issue for any potential small business. Some new businesses lend themselves to very little start up capital because the main selling point is the owner's skills and knowledge, for example consultants, web designers, PR specialists. Businesses which require stock holding, plant and equipment and other investment, face the real challenge of getting their start up finance together.

So what sources can you tap into to ensure your business gets off to a solid start?

Your Savings
The first port of call! If you have been in employment for some time then before going it alone you should hopefully have some spare cash behind you. Whether this be in the form of cash in a savings account or shares and unit trusts, this is a good start to your fund raising exercise.

You can be more focused in saving cash if you have had the goal of setting up your own business for awhile. Knowing you need to save to get your business off the ground will make sure you don't spend your future nest egg on unnecessary items. Whilst a new Plasma TV or the latest DVD Recorder may seem to be an essential purchase, knowing that you have a business to set up in the future will be sufficient a deterrent to keep the cheque book firmly locked away!
  

Keep Your Job
Some business owners are lucky enough that during the early days of the business they can keep the day job while working on the business during the evenings and weekends. This has two benefits. Firstly, they are still earning thereby allowing more time to build up a cash reserve. Secondly, it's an opportunity to test out the business to make sure there is a market.

Make sure that you can realistically keep both balls in the air at the same time otherwise you will end up doing justice to neither your job or your new business. The support of your family is also essential if you are to follow this strategy. They have to accept that what used to be 'family time' may have to take a back seat until you decide to concentrate on the business full time.

Family and Friends
These can be a useful source of finance for any start up. If you have harboured ambitions to run your business for some time, then many of your family and friends are already likely to know about your idea. You should therefore have an indication who is for it and who is against it.

If you haven't shared your secret desire then it's time to be slightly devious! If you are in the early planning stages start drip feeding your ideas to key people whom you think are likely to support you. Tell them your ideas, share your ambitions and goals and on a regular basis update them with your progress. The plan is to get them sold on you and your future business at an early stage.

Once you get to the point where you are ready to start asking for contributions hold an Investor Evening. Prepare a presentation outlining your plans, the business, the market etc. Show the potential investors what their return will be in recognition for supporting you.

Invite as many people as you can and promise an interesting and fun evening, Be bold at the very start; tell them exactly why they are there, so there are no misunderstandings. After you have done your presentation gather all the names of the people who may want more information or even a one-to-one with you.

Whilst this group are people who know you and so are more likely to trust you, don't forget that you are developing a very different relationship which can quickly turn sour. Be prepared for rocky times!

Bank Line of Credit or Loan
Now you're getting into the serious stuff! Getting support from a Bank for a new business is tough, as many entrepreneurs will testify. One sneaky way is to apply for an unsecured loan while you are still in employment. If you have planned things right you will know when you are starting up, so a few months before you pack your job in, apply for a loan based on your salary. However, make sure that you can comfortably meet the repayments. There is no grace period; you will be expected to pay back immediately, so your business will have to start earning very quickly.

The alternative is a business line of credit facility. There is no fixed repayment date, although they will be for periods from 6 to 12 months, and all you have to do is ensure that you keep within the overdraft limit. You will have to write a business plan to present to the Bank which outlines your idea and the business.

Mortgage or Equity Release
With the way house prices have been increasing over the last few years, the vast majority of people now have substantial equity in their homes. The cheaper alternative to a Bank overdraft or loan is a mortgage. The interest rate is lower and, as the repayments are spread over a longer period, the monthly repayment is less (although you will end up paying more interest in the long run).

The disadvantage of raising cash this way is that your home is potentially at risk. If meeting the monthly repayments is dependent on what the business can generate then a slow start could cause cash problems. So be very sure you can meet the repayments even during a lean period.

Credit Cards
If you haven't got any savings, can't get support from family or friends, or a Bank loan or mortgage, then there are your credit cards! However, whilst it's easy to draw down on your card, be wary! Credit cards are the most expensive form of debt.

They are ideal because all you may have to do is pay the minimum amount but card debt, as most people have found out, can be a long term burden. But, if you need a cash lump sum to kick start the business and you know you can pay it off within a few months, then it's an alternative source of finance worth considering, if somewhat unorthodox!

Business Grants

Business grants are available for specific industries, sectors and reasons. Grant providers will usually only give a portion of your requirement, so they cannot be used to totally finance a start up. However, they can be useful in filling a funding gap.

Business Angels
A popular way to fund a business are Business Angels. These are people, usually retired or successful business people in their own right, who are looking for opportunities to invest in new businesses.

In exchange for an investment they will typically look for a shareholding in the business and some hands-on involvement. They will have a vast business experience and so are useful people to have on board. However, you will have to accept an element of loss of control but that needs to be balanced against your desire for funding.

Getting finance for your new business can be a challenge but there are a number of avenues to explore and so with dedication and focus you could soon be on your way to launching your own small business.

The 3 Most Prominent Personal Growth Barriers

What's the deal with all this personal growth and self development business? Why bother in the first place? Charles Atlas who earned himself the title as the 'the world's most perfectly developed man' had this to say: 'Truest SUCCESS is but the development of self.'

It's so easy to treat personal development as 'optional' and so few people ever take the time to actively improve themselves. Your personal growth and self development is arguably one of the most important thing you can do with your time. You can even argue that to actualize your true potential is the purpose of being here. In many ways all your actions are geared towards 'self improvement'. Everything you do, you do with a positive intent. This, however is mostly unconscious and for the majority of people it's a case of pursuing 'things' and 'stuff' with the (all to common) assumption that when they get enough stuff they will be happy. 

You don't have to search too far to find just how wrong this theory really is. Every day we read about 'extremely successful' people who end up in rehab or who kill themselves. Why? To return to Charles Atlas – true success is but the development of your 'self'. At no point in your life can you just stop and say 'now I am successful – I think I'll take the next 10 years off'. Unfortunately this is 'the dream' that so many people aspire to.

The key to a lifetime of happiness lies in personal growth. Real and lasting fulfillment in life comes from consistently improving the quality of your life. Life is dynamic and it has to keep moving. Like in nature, everything that does not grow, dies! You will either grow or die, and although you probably won't die a physical death, you most certainly will suffer a psychological death. Depression is but one example of the effects of failing to grow as a person. If you are not growing you will feel like you are dying.

Every day life hands us opportunities to grow. They are mostly disguised as problems and unfortunately most people curse them instead of seeing the wonderful opportunities that they present. Earl Schoff once said 'Don't wish for less problems. Wish that you were better'. This is where personal growth comes to play and you must do it on purpose and with an active state of mind.

So why do people fail to actively participate in their own personal growth? Well, there are certain personal growth barriers that prevent them from actively progressing in any area of your life. The key word being 'actively'. The three biggest personal growth barriers are three interrelated behaviours that tend to keep us immobilized and locked up in inaction. The result being the failure to progress with our lives.

Personal Growth Barrier #1: Procrastination

Procrastination is the irrational delay of tasks, especially important ones. On a conscious level you might want a specific result and you know what course of action to take, but still you remain immobilized. The failure to act is what keeps you where you are. It is likely that what you are procrastinating about is what you MUST do as this will help you grow in your ability to take action and just do it. Keep in mind that you only procrastinate about tasks that you value and at some level you know you will benefit from it. 

Personal Growth Barrier #2: Indecision

Every single action is preceded by a decision. The ancestor to every action is a decision and the failure to act can be traced back to the failure to make decisions. The ironic thing is that not making a decision is a decision - isn't it? Indecision is like a disease that you have to eradicate from your life. Indecision is simply the result of a fear of failure and by not making a decision you can't fail – right? Realize that nothing in the future has happened yet and fearing the worse possible outcome will almost certainly keep you from making the decision. If you don't make the decisions you won't take the actions and you will remain immobilized.

Personal Growth Barrier #3: Comfort Zones

Comfort zones are all those things that you are too familiar with – and often to the point where you don't even attempt anything else. Inside your comfort zones everything is known and you have this sense of certainty that you can comfortably deal with anything that comes your way. You've done it before and you feel 'at ease' with it. Stepping outside your comfort zones challenge your beliefs and it challenges your perceptions. Stepping outside your comfort zones however, challenges you to grow as a person – you have to grow to get comfortable outside your old comfort zone. Most of your limitations are self imposed and controlled by what you belief you can or cannot do, what you like or dislike, what you think is right or wrong. You have to keep stretching your 'self' physically, emotionally, mentally and spiritually to avoid standing still and remaining imprisoned by your comfort zones. Oliver Wendell Holmes once said 'Man's mind, once stretched to new idea never goes back to it's original dimensions.'

All barriers are only that – they are barriers. It often strikes me how these typical vehicle barriers at boarder check points are so 'flimsy'. They can hardly stop a bicycle, yet they stop big sixteen wheelers. The barrier is more psychological than actual. So are the barriers to your personal growth. They can stop you, but they can't keep you unless you allow them to. Simply acknowledge them and then move on. Personal growth is a choice and it's an active process. To ensure a happy and fulfilled life that is filled with joy and appreciation you have to consistently grow and expand your 'self'.