Do you need funding to get started with your new business?
10 Questions you need to ask yourself before applying for funding
With the start-up culture thriving in the UK, the Government-backed StartUp Loans Company outlines 10 questions you need to ask yourself before applying for funding for your business.
1. Have you written a business plan?
A written business plan is one of the first steps in turning your idea into a reality. It helps to clarify your concept and spot any potential problems. When applying for funding, your business plan is the 'face' of your application, so make sure it's saying what you want it to say.
If you're unsure where to begin and need help with what you should include, Start Up Loans have a useful business plan template.
2. Do you have proof of any sales or contracts mentioned in your business plan?
A good business plan will specify the market your product/service is targeted at. It will also detail the demand for the product/service your business will provide.
If you are going to make claims of sales or contracts in place already, you have to be able to verify them with proof. This might mean providing a copy of the contract etc.
3. Is your business plan up to date? And have you reviewed the content?
The dynamic nature of business is likely to mean that things will change as you work on your business plan. It is imperative that, when you apply for funding, you are presenting a business plan that is as up to date as possible.
In addition, simple things like checking your spelling and punctuation will improve the professionalism of your application and increase the likelihood of getting funding approved.
4. Have you prepared a cashflow forecast?
This is a forecast of how you see your business performing financially. For anyone considering lending or granting you money, it's also their opportunity to see if you have really thought everything through so make sure you include all of your costs and revenue streams.
Most importantly, be realistic. It might look impressive to have £1 million in the bank after 12 months, but is this really a true reflection?
If you need more guidance on preparing a cashflow forecast, Start Up Loans have some tips and a free cashflow template..
5. Does your business plan correlate with your cashflow forecast?
Check that the numbers you mention in your business plan are the same as those in your cashflow forecast.
These two important documents need to fully correspond with each other so make sure you aren't saying one thing in your plan and another in your cash flow.
6. Have you got a Personal Survival Budget?
How much money do you need to pay essential bills such as rent, food and childcare? Before applying for funding, you need to establish the absolute minimum that your business needs to make to support you - this is called a Personal Survival Budget. You will need to abide by this budget whilst the business gets up and running so it is important that you think about this carefully. Too often, this is ignored or not looked at in enough detail.
The Money Advice Service has a great budget planner you can use for this purpose. Don't forget to look at your bank statements.
You'll be surprised how much you are actually spending!
7. Do you know the industry you are looking to enter?
It's very important that you know the industry your business is entering. Carry out as much research as possible; get to know the products, your competitors and how others operate. If you prefer, Bizlaunch can do this for you.
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Join more than 40,000 Start Up Loan receipients and realise your business dream
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