Starting Up Your First Small Business |
Posted: March 17, 2017 |
There has been plenty in the news recently about the number of small businesses running in the UK right now, particularly with the u-turn the Chancellor of the Exchequer had to make recently after the outcry about National Insurance increases for the self-employed. But you might be surprised by just how many small businesses there are in the UK and how much they contribute to our economy. Statistics from the FSB (National Federation of Self Employed and Small Businesses) show that at the beginning of 2016 there were 5.5 million SMEs in the UK, which is 2 million more than we had back in 2000. Of course the long recession may have contributed to this large increase as more people were made redundant and started up businesses through necessity rather than choice, often with redundancy payments to help them get started with funding the business. But, still, by any measure, this is a large increase in the number of small businesses over a 16 year period. Large organisations may be much better known in this country but actually SMEs make up 99.9% of all private sector businesses and 47% of private sector turnover. That's a pretty hefty percentage of the overall turnover and yet 76% of all businesses are "one-man bands" employing no one but the owner, and those small businesses are contributing significantly to our economy. So if you have ever thought about starting your own businesses but worry about whether you could make it a success these figures indicate that there are plenty of small businesses thriving so now could be the right time to strike out on your own. Financing a Small BusinessIf you are going to start up your own business one of the key areas to get right are the finances. Many a small business has failed not because they didn't have a great product or service and not because they didn't have a great sales and marketing campaign but because of cashflow problems. So think carefully about how you will fund the start-up phase and the growth phase so that your business doesn't suffer this fate But just what is the best way to borrow money to start up and then grow a business? Business owners who already have a clear idea of their product or service offering and can provide prototypes or details of services will find it easy to discover ways to get business funding and finance but it still isn't an easy proposition to get a loan from banks and other lenders in the current economic climate. Mainstream banks and lending institutions are reluctant to lend to small businesses so it can be a struggle to find the money you need. That said, many people do manage to find the money they need despite strict lending criteria and many people do manage to make their businesses a success. Some of the options successful small businesses have used are angel investors, industry grants or crowd-funding. It is a risk but then nothing worth achieving is ever without risks.
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