You have carried out the necessary due diligence, conducted research and now know that there is a viable market for your business idea. It’s an exciting time in the development of your business, but you now realise you need a considerable amount of funds to get started and make your business dream a reality. The following provides a variety of potential starting points for discussion with your business and financial planner. Please note this information does not constitute financial advice and we always strongly recommend discussing these options with a professional.

Own Pocket

During the early stages, many entrepreneurs decide to fund their startups themselves to avoid debt and retain complete control over their business. Starting your business with your own investments means operating leanly on a shoestring budget. Whereby you will have to strive to get the most out of your cash and existing assets by making smart investment decisions with clear mechanisms for ROI tracking. Utilising free and paid services, such as marketing consulting, or business and financial planners can help you to make the most of your financial situation and in many cases help you to use your budget more effectively

Your Network

Many entrepreneurs ask for financial support from their own immediate network, such as family, friends and acquaintances. Mutual trust is easier to achieve within your own network, however, as always care should be taken when mixing relationships and business. When looking to external parties for financial assistance, always ensure both parties are entering into it with matching expectations. It is also important to have procedures in place in case plans go awry. It might be beneficial to have an impartial third party involved (such as a mediator or lawyer) to help assist with any issues or roadblocks faced. Your network can be grown and accessed across networking websites, such as LinkedIn. These sites also offer a platform for the promotion of your business during later stages. 

Grant Funding

Business related grants are often available from local and state and federal entities and in some instances, private companies. You may find that your business qualifies for one or more of these grants which can provide access to varying degrees of funding and support. However, if you do qualify, note that the application process usually requires a significant amount of time, information, and effort, and it can sometimes take months before a final decision is reached.

Don’t waste time on last minute grant applications and instead think ahead, reviewing the grant options available (as they are often run yearly) and starting early on your applications. Some grant applications may even require evidence of assistance from an external firm which of course adds to the time in which you’ll need to allow. Examples of grants available to new companies include the Home-based Business Grants and The Lord Mayor’s Budding Entrepreneurs Program

Crowdfunding

Crowdfunding is a new alternative, in which finance is raised online from a large number of smaller investors ranging from friends, colleagues, peers, and strangers. There are two key forms of crowdfunding; reward and equity. Reward crowdfunding uses selling arrangements to launch the business idea, meaning the entrepreneur won’t sacrifice to equity or incur debt. Equity crowdfunding sells ownership or share in future revenue in exchange for cash contributions. Examples of crowdfunding websites include Kickstarter, Indiegogo, RocketHub, FundRazr, and GoGetFunding. When comparing crowdfunding websites it is important to look at the small print, which usually involves commission, transaction fees, and other various charges.

Banks

There are two primary funding options available from banks; loans and credit. Getting a bank loan is usually the more difficult option, requiring documentation, business plans, and a solid financial record. For smaller startups, using credit may also be used as a short term solution, however, this option limits you to your credit limit which is usually lower than a normal bank loan. As credit card interest rates are expensive, this is not recommended unless you are certain you can pay off the credit card bills in a timely manner. For both of these options, seeking advice from a business and financial expert and speaking with your financial institution is advised.

Seed Funding

Seed funding is raised from a pool of investors. The company from which the seed funding is collected usually expects to have some level of involvement in the business along with part ownership. Seed funding is a very early form of investment, meant to support the business until it can generate its own cash flow, or gain further investments. Recent Australian success story Canva gathered $3 million funding round before launching their online graphic design website. Seed Funding opportunities available include Follow[the]Seed, Startmate, Slingshot, iLab, and AngelCube.

Business Incubator

Incubators are companies which provide training and space for startups to operate during their early stages, rather than monetary investments. Services provided by business incubators may include access to mentors, marketing assistance, internet access, accounting and financial management, links to strategic partners, and access to angel investors or venture capitals. Business Innovation and Incubation Australia is an excellent resource to find information about incubator programs within Australia. Brisbane based incubators include iLab, Brisbane Technology Park, Gold Coast Innovation Centre, and QUT Creative Enterprise Australia.

Angel Investors

Angel investors are individuals who contribute their personal funds in exchange for equity and a level of control in a company. These individuals usually provide the second round of funding for a startup, once there’s been some evidence of business potential. Angel capital fills the gap between sourcing finances from friends and family, and provides a more formalised source of venture capital. Angel investors also provide non-financial support, through their knowledge and industry contacts. At this level or round of funding, an exit strategy, whether selling or undertaking an IPO, is expected. Angel Investors available within Australia include Innovation Bay, Sydney Angels, Melbourne Angels, Capital Angels, Brisbane Angels, Scale Angels, and Business Angels. 

Venture Capital Funds

This type of funding is obtained from companies who invest in startups as their core business. A venture capital fund manages money from several investors, across a portfolio of businesses usually during the growth stage of a startup. Due to the weight of investment in the startup, venture capitalists often become highly involved providing technical direction and assistance in decision making. Their goal is usually to get the business to a level at which it can be sold or publicly offered. The money that an venture capitalist contributes is typically used as the basis for the company’s overall valuation. Examples of venture capital providers within Australia include Blackbird Ventures, Yuuwa Capital, Starfish Ventures, and Southern Cross Venture Partners.

For example: Ms. X  gives $30,000 for 10% of the startup, therefore the startup may be valued at $300,000.

It is important to remember that the most essential part of acquiring funding is having a clear vision and/or business plan before approaching investors. It is natural for investors to want to know where their money will be going, and what they can expect in terms of growth and revenue. It is also essential to make informed decisions based on advice from financial advisers before engaging with any of the above funding options.

The post 9 Ways You Can Fund Your Startup appeared first on Reload Consulting.

Your business plan represents the roadmap for your business, enabling you to develop and implement strategies that are in line with your business objectives. This ensures your operations are efficient and targeted towards achieving your goals without wasted expenditure along the way.

Often, however, the extent of detail and inclusions required for a business plan can be confusing, with a vast array of options available from a 3-page template plan to a lengthy 50-100 page custom plan. Determining which option is right for your business can be difficult and can leave many business owners unsure about which path to take. Below we outline the differences between template and custom business plans, to help you identify which is best for you, your business and objectives.

Template Business Plans

A template business plan can provide you with a general outline of the basic components that are necessary for a business plan. These usually range from 15 to 20 pages in length and can be a great guide for getting an idea off the ground. Template business plans are readily available online, some available as free resources and others sold at a low cost.

While they are great for quick turnaround and low cost, the main downside to using template business plans is that they provide a very general format. Even with the numerous industry-specific examples that are available online, they don’t take into account the unavoidable truth that what applies to one business, doesn’t necessarily apply to another. Additionally, not every business owner’s background is in business, and often there can be a lot of confusion when trying to ‘fill the gaps’ under the template headings – especially if they aren’t all relevant to that business.

With that said, templates can be a great option for students to use for university assignments and for entrepreneurs starting out on a shoestring budget.

Custom Business Plans

Custom business plans are exactly that, custom. They are developed based on a deep understanding of the business and the market in which it operates, in line with the business’ goals and objectives. These business plans typically go into a lot more detail and are therefore much more comprehensive than a template plan, with the length of the document varying greatly depending on the business and objectives that it is addressing.

Unless you have a sound business background, it is usually advised to seek out the services of an expert business consultant to help craft your custom business plan. This ensures that the end result is backed by sound business knowledge and research, and covers all of the requirements to meet your objectives (i.e. includes all information that the bank needs to see to approve financing applications). As would be expected, engaging an expert to deliver a custom higher quality business plan does require a higher investment and so may not be the best choice for entrepreneurs starting out. However, if you are applying for funding or have other specific objectives that you need to meet, the outcomes are certainly worth the investment.

When making the call as to which path to go down, it’s important to consider the objectives and purpose behind having a business plan and subsequently, the investment that you are willing to make in order to achieve that. If you’re still unsure, speaking to a consultant can be a great way to gain further clarity. An initial chat shouldn’t cost you anything, depending on who you go to, and they should be able to advise you as to which option will be best suited to your current situation and desired objectives.

The post Custom or template – which business plan is right for you? appeared first on Reload Consulting.

Starting a business on a shoestring budget is becoming one of the most popular ways for entrepreneurs to launch their dream ventures. Shoestring Startups, also known as Lean or Bootstrap Startups, are based on the concept of cutting costs and eliminating waste while maximising their existing resources.

We’ve outlined some of the key considerations to take into account when starting on a shoestring below.

Managing Several Hats

When your resources are tight, you have to be willing and prepared to wear a number of different ‘hats’ and take on a variety of job roles within the business. One morning you’ll wake up as the Sales Director and by the afternoon you’ll have changed hats to the Recruitment Officer – if that sales meeting went well!

Of course, time is a largely limiting factor to this, so looking for alternative and affordable options to resource your business needs and also free up the founder’s time is extremely valuable. The internet and globalisation are opening a lot of doors in this space, with websites like Fiverr and airtasker providing shoestring startups with access to freelancers all over the world and a new means of managing their day to day tasks. Handing over the hat to someone else can be daunting, but if communication is clear and flows both ways you’ll likely be surprised at what you can achieve.

Get Creative with your Marketing

Marketing the business is not about throwing bucket loads of money into broad-scale advertising tactics. It’s about having a can-do attitude and creatively looking at what your objectives are before researching and leveraging the variety of new methods available to achieve them.

One of the most popular startup objectives we hear is the need for brand awareness and audience building. This is a valuable objective to achieve as having your name on more lips equates to more traffic to your site/store/office and hopefully more sales.

This objective fits well with the shoestring approach as we now have 24-hour access to a global audience via digital means. As long as you know or are willing to learn how to leverage non-traditional means of marketing and get really targeted with your approach, you’ll be able to build your brand on social media, nurture your contacts via email marketing and direct them to take an action on a website you built for free, on a platform such as WordPress – all for little or no cost! And that’s just the start! There’s a plethora of tools, information and resources available to the budget conscious entrepreneur. You just need to start looking.

Set Clear Goals, Plan and Track

With any project, it’s always critical to ensure you know why it is you started out and what you want to get out of the process. This is especially true for Shoestring Startups as the more limited the resources, the more planning needs to go into the allocation of their use. This planning needs to have your business goals front of mind to ensure every investment decision, big or small, is moving you closer to delivering on a sales promise, promoting your brand, improving your product or whatever it is that contributes to why you are in business.

The other side of this coin is tracking performance. It’s great to plan for things to work and research the chances of success, but only once you’ve commenced that activity can you truly evaluate how that translates within your unique situation and market. Tracking the success of different initiatives or investments and the return on investment will ensure you are armed with the information to abandon the activities that didn’t work and adjust your budget for those that did.

In the end, having the dexterity to focus on what you can do in and outside of your business, getting creative in your resourcing and marketing techniques and keeping your goals front of mind, will all help towards getting your startup off the ground – on a shoestring budget.

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