Before you turn to the bank for a loan, think about creative ways to finance your business without raising start-up capital from external sources
The Top 10 tips are:
Start small: Even if you have a grand vision for your business, concentrate on generating short-term revenue to get enough cash to fund the long-term business idea.
Focus on sales: Get on the phone and start cold calling. Go for quick wins — contracts that bring in cash and will lead to other sales. Generating cash flow is the immediate goal in order to start building your business.
Concentrate on networking: Don’t waste money on expensive advertising which can be a hit or a miss. Concentrate on networking and building up contacts, as word of mouth is the most effective form of promotion.
Keep overheads to a minimum: Work from home if you can and borrow or lease rather than buy expensive equipment. It’s easy to get carried away resourcing a new business, but only buy what you really need to get the job done.
Choose wisely: Open a company bank account that offers free business banking for start-ups for at least the first 12-18 months. Internet banking makes it easier to keep a close eye on transactions.
Control debt: Utilize a 0% credit card for essential expenditure, — but be careful to keep debt under control and either pay it off or transfer to another 0% card well before the interest rate goes up.
Invoice your clients in stages: 50% at the half-way point and 50% on completion. Make sure you have clear payment terms in the contract and on the invoice.
Retain cash in the business: Take as little out yourself as possible. This might mean going without a holiday or you may need to start your business whilst still in part-time employment to cover your bills.
Try business bartering: Offer your design services in exchange for goods and services you need. This saves you spending cash and can be a good way to develop relations with a new client base.
Put time into PR: Think of an unusual hook and write a press release or article. Conduct a survey about a topical or controversial issue with your potential customers. Publish the results as a story to attract free publicity for your business.