Raising Finance
Before you approach anybody for funding, you will need to work out where your business is, where you want it to go, and how much you need to take it there. If you’ve reached the point where your business requires an injection of cash, it may not always be obvious where your first port of call should be. By analysing your business – both in terms of where you are and where you want to take it – the most appropriate means to finance growth should become clearer.
Before looking externally, you should establish if there are funds which could be released internally to assist growth. Sources include:
Use Spare Cash
If you have surplus money in your business bank account not required for the day to day running of the business, use it for expansion - it's cheaper than keeping it and borrowing money.
Cut costs
Perform an analysis of where you spend money and then consider how to cut costs. Think about:
- using more cost effective suppliers
- negotiating bulk discounts
- moving from rented offices to a home office
- paying less for utilities such as electricity
Offer share options
You may want to take on employees who you feel could accelerate growth. They may work for reduced pay in exchange for the option to buy an equity stake in the business at a fixed price at some point in the future. This keeps staff motivated to achieve targets whilst cutting the wage bill for the business.
Sell assets you no longer need
Consider if anything could be sold for cash such as property that’s not providing a great return or inefficient or underused equipment or stock.
