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Guest Post by Eve Pearce

Many people are hesitant to officially start up a small business because they fail to undertake essential preparations for the financial and practical stability of their project. The dreaded business plan is one such factor. Approach any local bank for advice on obtaining a start-up loan and they will tell you the same thing. You need a business plan. Not only that, but it needs to be thorough, precise and comprehensive. Your bank manager is not your enemy. In fact, local banks can prove to be very useful business allies if they are able to offer you a suitable loan to set yourself up. You just need to be professional, reliable, and most of all, responsible.

Does Everyone Have a Business Plan?

You might have spoken to friends or family members already in business, and perhaps it seems as though they do not have a business plan. Perhaps they don’t see it that way. Traditionally, small businesses come about by accident or by natural evolution. Some people nurture a hobby, for example photography, and when they are older and more confident, they might take the break and set up in professional business. Or their circumstances might change through redundancy or changes in the workplace, so that they feel the need for a fresh start. It doesn’t always happen this way. You can start your small business any time you like, but there are differences between doing it right, and doing it wrong. You will have to comply with government laws and regulations. Your business plan is a part of this process. It ensures that you set out your intentions clearly, and you have a legal document to refer to as and when it is needed. And of course, there is the ever-present question of money. Where will you find the necessary finance to start up your small business?

Obtaining a Start-Up Business Fund

Finance can be obtained in many different ways. As mentioned previously, your first option is usually to approach your local bank. You present a thorough and well-researched business plan, your financial advisors check it over, and they will confirm if you are eligible for a start-up loan or not. Some small businesses take the more risky approach of using companies that provide payday loans. A payday loan is designed as a short-term offer of ready cash. Initially they sound like a great idea, especially if you just need enough money to pay for appliances or equipment in order to complete your jobs. The downfall of these loans is that they sometimes leave people trapped in a cycle. You must be certain that you are able to pay the balance of the loan at the end of the month, or whichever are the agreed terms. If not, you could end up paying ridiculously high interest costs for repeated borrowing, and that will be detrimental to your business. A payday loan should only be considered as a rare back-up option when it comes to financing your business. You must be able to provide stability in order to grow your business, rather than being trapped in a cycle of debt that could lead to personal stress and the breakdown of your  company.

Another popular, and more stable, option for business finance is angel funding. This is a fairly obscure concept, only recently becoming more widespread in popular consciousness. There are lots of high-profile entrepreneurs and business owners all around the world who want to help people set up their own successful enterprises. These entrepreneurs have been there before, they have struggled and striven to get their own companies off the ground, and they understand the plight of the new business owner. Therefore, now that they are in a position to assist financially, they are open to requests from relevant people and organisations. You simply have to find the right company director or business owner for your business plan.

Angel Funding and Crowd Funding Options

Another aspect of angel funding is that lots of different people can contribute towards a project and set up a business as a group. This process is known as crowd funding, and is a continuation of the angel funding principle. Crowd funding people are those who perhaps find themselves with a little spare money and they want to invest, but they do not want to lose it in large established organisations. Instead they can join a crowd funding website or group, where they can read about business plans submitted by new entrepreneurs and potential new business owners. Again, your business plan has to be watertight. You have to sell yourself, your business, your ideas, and your vision for the future. The business plan does not simply appear in front of you. Yes, you can obtain templates from lots of Internet websites, or from your banks and even from government organisations. But the work is yours. Do it yourself, do it properly, and do it to the highest possible standard so that you have a much better chance of succeeding as an entrepreneur. 

Believe in Your Business Advisors

If the idea of writing a business plan fills you with dread, you can seek professional advice from established businesses in your area.  Yes, these companies will charge a fee for their service. Do your research, meet with the advisors, and make your own informed decisions before choosing the right people to help you. If you have already begun to write your business plan, do not be afraid to share it with your advisors or even with your legal team. They will give an honest and professional opinion on the quality of your proposal, based on their experience and knowledge. These business allies are here to help you. We can all work together, if we can only trust each other and share our talents and skills. Don’t be afraid of your business plan. Get it done, and reap the rewards that will surely follow.