Government funding options for starting a small business
Prior to the COVID-19 Pandemic the world seemed so simple, didn’t it?
All you had to worry about was the time you wake up, your work, some bills and the like.
Now, things are a bit different!
Either way, life goes on and we, the people of the United Kingdom are the ones who will have to bring the economy back to what it was, and better.
The one way to do that is to get out there when the time is right and do business.
If you’ve ever thought about starting a small business, now is the time to start the planning process.
But don’t worry, the government is here to help and assist you with many of the small business startup costs and expenses that you may encounter.
Starting a small business in the UK
Starting a small business is not for everyone – not everyone is cut out to be a boss.
Being your own boss requires time, dedication and often much more involvement than when you are working for someone else – but the good thing is that it’s your own, it’s for you!
When deciding on starting your own small business, you have to do a few things to ensure a successful startup.
- Consider your business model
- Prepare a business plan
- Find potential government funding options
By following these 3 steps, you will be preparing your small business for success.
Consider your business model
Not everyone has a business idea – a valid one at least.
While you may think you do, there is a lot to consider when deciding on a business model to actually turn into a business.
- Is there a demand for the product or service?
- Do you know anything about it? Do you have experience?
- How will you make money?
- Who will buy?
These 4 key points will help you better understand if there is any validity to your business. If you have a great product or service, but nobody will buy it, you can’t make money – what’s the point?
Once you have considered these points and believe you have something worth going forward with, the next step is the business plan.
Prepare a business plan
A business plan is definitely a must when deciding to start a small business.
While it may seem like a simple “document”, it is what will help you determine the steps needed to succeed as well as open doors to potential funding options.
A traditional business plan is often the best way to plan your business. In other words, a traditional business plan will explain the following:
- Your business model
- The market and the customer
- Your competition and your advantages
- Your product and/or services
- The marketing plan
- The potential of the industry (also referred to as your growth plan)
- The projected financials
- Your funding needs
Once you’ve gone through the process, explained your business model in detail, and outlined your plan, you will have a better idea on how to move forward and what you will need.
Finding potential government funding options
When starting your business, your business plan will tell you a lot. In fact, if all is done correctly you will have an idea of your startup expenses, the costs which must be covered, how much money you have and how much money you need.
The money you need will be something you’ve explained in your funding needs within your business plan – and this is the money you want to attain from the various government sources.
The UK government supports its entrepreneurs through various government funding options. These options include programme schemes such as:
- Government Grants
- Government Loans
- Government Tax Breaks and Tax Credits
While there are many different government programme types, they mainly fit into the 3 categories above.
There are numerous government grant types including non repayable government grant programmes, conditionally repayable government grants and partial contribution grants.
Government loans are the most common programmes available and they often come in the form of low interest government loans, no interest government loans, conditionally repayable government loans and guaranteed government loans.
Tax breaks and tax credits are often schemes that come after you’ve spent the money on your business and the various expenses – so don’t forget about these later on!
What is government funding available for?
The funding available from government sources come from multiple levels of the UK government. This means local, regional and national programmes.
While not everyone is eligible, your first step should always be to start your business plan and clearly explain your funding needs.
The various programmes offered by the government provide funding for specific purposes, including:
- To hire and train your staff
- To purchase tools, supplies and equipment
- To pay for leasehold improvements
- Research and development costs
- Cash flow improvements
- Marketing and Advertising
- Other expenses associated to starting up or expanding your business
The best step to finding out which programmes your small business may be eligible for is to take a moment and use the Funding Calculator Tool provided by UK Startups.
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