Show Me the Money – Funding Your Idea

It’s the number one question we get asked “how do I get money to start up my business, are there any grants?”

First up – there is no easy money available, especially now, and as a young person…otherwise everyone would be starting a business. So be prepared to do your research, work hard and put some of your own cash in.

What does it takes to bring in the money to support your business idea (or social enterprise), and then how do you manage it once ya got it?

Read up…

There’s a number of places you could go to get financing for your idea. You could:

> Submit a financial proposal (detailing what amount of $ money you need over how long and your plan to pay it back!) with your business plan to a bank to secure a business loan.

> Find a venture capital investor to inject some cash into your business. They’ll want to see a financial proposal, your biz plan, and know exactly when they can get their hands on a piece of your profit pie. Check out the Australian Venture Capital Association & Business Angels & AusIndustry . Plus the Australian Small Scale Offerings Board can help you prepare your proposal for this – tell them Frank Team sent you!

> Secure a financial backer or sponsor. If there’s a company out there who wants to target the same market you do, and you share similar business values, then approach them with a sponsorship proposal they can’t resist. You may offer branding rights, promotional opportunities, product placement, signage etc in return for their financial investment.

> Apply for a grant and enter competitions. There are stacks of grants out there, though it can be tricky to nail one if you’re a for-profit company. Nevertheless, check out Community Builders , GrantsLink and AusIndustry from the Australian Government for some leads.

> Contact your local Business Enterprise Centre or industry association/network for suggestions on available grants and competitions relevant to your industry/business idea.
> If your folks are cashed up, it could be time for a little “family investment” but know that mixing business with family can get messy. Make sure there’s a repayment plan in place.
> Consider self-funding as well as starting out small then building your biz up, many successful companies were started on less than $100! Dip into your savings or perhaps get a credit card just to start with – be sure you can pay it off before the massive interest kicks in though.

Make sure you build a budget! A budget allows you to map out how much money you’ll need to get your idea off the ground plus estimate your revenue.
Step 1 – list all the actions you need to take over the next year to get your idea to market (everyone’s list will be different) eg: marketing brochures, website, bank loan repayments, office space, accountant’s fees, salary, internet connection, stationery etc.
Step 2 – Now source quotes from companies who can provide these services eg: call some printing companies and ask them how much they’d charge you to print your A4 posters. Now add up all your quotes.
Step 3 – Work out how much money your idea will bring in eg: you estimate people will pay $15 for your ‘widget’. So how many widgets do you need to sell to cover your costs and make a profit?
Step 4 – If your costs are too high, go back to Step 1; work out how to do things cheaper or what you can cut back on.
Step 5 – Keep your finances in check by referring to, and updating, your budget regularly. Consider creating one for your start up year and another for your second year in operation so you can map out the all-important flow of cash through your business – otherwise known as a Cashflow Statement.