Getting started with a new business in any sector requires a considerable amount of investment. There are numerous things that need to be taken into consideration when forming a new business. This can include renting a premises – where applicable – marketing, advertising and communication systems; these all take up valuable time and budget.
It is often considered to be best practice to have several different revenue streams when beginning a new venture, this means that you need not tie all your needs to one particular source.
Many new business hopefuls find it tough to secure the early capital they require. Lenders more often than not, consider those with little trading experience a high risk. This trend, particularly in the last few decades, has meant that many have turned to personal savings to start their journey into business.
When using savings, it’s advisable to ensure you have enough working capital for at least twelve months after the initial set up date. The rest of the funding you have remaining should be left for vital payments such as bills, rent/mortgages or insurance needs.
PPI Claim Back
Payment Protection Insurance was mis-sold to thousands of people all over the UK, and many people have used their refund to start up their own business venture. Claiming back any PPI that was mis-sold is another form of revenue stream that is often overlooked.
Any bank or lender that you go to will require a solid business plan, as well as a relatively clean credit history. Since the recession banks are much more careful of who they lend to and how much they give away. However, some banks are much more lenient when it comes to lending than others. Shopping around for the best interest rates and assessing your requirements first is the best way to go.
Borrowing or Receiving Investment from Loved Ones
Borrowing or taking investment from friends and family is a great way of getting the funds you need without the additional interest or lengthy wait for approval. However, some should ensure that they set up a clearly defined contract that specifies the terms of repayments, which included time limits.
There are multiple revenue streams that a new business can tap in to, but the specific advantages of these sources will vary depending on the individual needs of the business. It is certainly worth researching very thoroughly and assessing every available option.