In the UK, thousands of businesses are started each year. The one thing that all small businesses have in common is that they seek some sort of financial support form. Be it from the government, banks, private inventors, business owners look for start-up business grants and funding to get a boost in the first year of business.
The first year is often the toughest as it is financially demanding, as it requires upfront costs for various business startup expenses, operating capital as well as further investment to advance. This is all done while you are generating minimal revenue as you start-up and grow your business.
To ensure you can successfully start-up and get business grants and funding, follow the below step by step guide.
How to apply for start-up business grants & funding.
Before you even consider seeking any funding for you business, it is a good idea to stop and think.
Many business owners who over-borrow, can fail early on due to the demand in debt repayments; so before you borrow any money to start your business, take the time to determine what it possible, what you need and how much.
The key steps in knowing how to get business grants and funding is to:
- Have a proper business plan
- Know your business start-up costs
- Understand what more you need (financially speaking)
- Research the funding sources
- Get help when you need it
Your Business Plan
To properly apply for start-up business grants and funding, you as a small business owner need to take the time to develop a business plan.
Statistics show that business owners who startup without a business plan are 8 times as likely to fail within the first 3 months in comparison to those who have a proper business plan put together.
A business plan is a great tool to have to show potential grant and business start-up funding agencies that you have what it takes to run a successful business.
Your business plan should explain your business model, your customer and market, how you plan on growing and promoting the business, as well as how you will generate a revenue.
The business plan should also provide a clear understanding how your financials, or financial projections, covering your costs and expenses, as well as an explanation of your funding requirements to make it all work.
If you are unsure how to develop you’re own business plan, using the business plan builder tool is a great way to start to create a formal plan that will help you with applying for start-up funding, grants and loans.
Understanding your business start-up costs
When you get into a small business in the UK, you will quickly realize that everything costs.
You will have various start-up business costs, including those that are the initial one time startup costs, the operating expenses as well as the on-going expenses that you will have to grow your business.
Depending on the type of business you want to start, undertesting your business start-up costs will help you with finding the relevant funding options you may need.
The one time startup costs may include things such as business registration, website development, renovation costs, equipment, or the costs to purchase inventory upfront.
The operational costs may be the day to day costs that you must have to run your business, such as you rent, utilities, staffing needs as well as other expenses that ensure your business operates smoothly.
Luckily the UK government has a number of small business start-up grants and loans to help with funding the various startup expenses a small business owner may have. So before you start the search, be sure to fully understand your expenses first.
Know your Funding Needs
Once you have started working on your business plan and have taken the time to determine your business startup costs, the next step is to determine what you have available (financially speaking) and what more you need.
You may have saved £10,000 to start your business and those expenses may be able to cover half of your start-up expenses – but what about the rest?
At this stage, it is a good idea to start with determining and creating a priority list of what you MUST have versus what is NICE to have. This will help you focus the money that you do have onto the expenses that will help keep your busines operational while you look grants and business funding to cover the other part of the expenses.
So you do have to be a bit proactive and try to determine what expenses you should cover and what you can wait a bit for.
Keep in mind that when seeking funding for your business you should always start your funding search 2 to 3 months ahead of time, as it can take some time to find the proper funding and get the money.
Once you have determined what you need in terms of the expenses that you can’t cover on your own; write those down, along with the appropriate amounts. These become your funding needs.
These funding requirements are what you will be contacting the various funding agencies about and asking to have funded.
It is a good idea to note that not all government funding agencies will fund all needs; so having a breakdown and keeping a close eye to those start-up expenses that you can’t cover on your will will be an ideal way to break it down – allowing you to apply to multiple funding programmes.
Finding the Funding Sources
You have a business plan; know your costs and know what you need funding for – now, the only step that is left is to find the relevant funding sources.
Aside from the traditional bank loans, credit cards, private investors – the big one, the most valuable one is the British government.
The government has numerous programmes that help with nearly all types of business start-up expenses and the funding comes in the form of business grants, government loans, tax breaks, credits and more.
It is important to remember that not all government funding agencies will cover all expenses, so having a breakdown of what you need funding for and knowing how much will be your best bet to ensure that you can apply to multiple funding programmes.
To start your funding search, it is recommended to use the Funding Database here at UK Startups, as it contains all of the government business grants, loans and tax options, in one place.
Once you have found the sources – it’s time to apply!
Applying for start-up business grants & funding
The final step – the application time.
While this should not be difficulty if you have taken the time to properly go though the steps, the application time is often where most businesses fail or give up.
Each funding agency has a different application; different rules and criteria’s – this makes it extra difficult, especially if you are applying to multiple options
To apply for a startup-up business grant or funding options, getting expert help is often the first step you should take.
The last thing you want is to do all this hard work and apply incorrectly – resulting in wasted time and weeks of delays.