many
entrepreneurs trying to get a business off the ground are finding it
hard to raise money, here we will take a brief look at how this may be
achieved.
the most easily available business to set up is the
increasingly popular franchise, the number of these opportunities around
is mind confusing, that being said if you have or can raise from £5000
to £100000 depending on the type and size of franchise you undertake,
then it is surely one of the easiest ways to set up in business as
everything from training to stock is supplied to you on a plate.
should
you feel that franchisees are not the thing for you, and you have or
wish to start a fully independent business, but need the capital to get
started then their are ways to go about it, below are a number of
methods i not only believe work, but have helped clients to implement.
property:
using
property is a simple way to make money at any time, regardless of
whether the economy is doing well or not, their are two basic systems in
use by those using property as an income source.
flipping a
property is possibly the easiest and quickest system around, oddly
enough it is mostly used by businesses rather than individuals, why it
should be the case is possibly due to the fact that the system involves a
high turnaround rate with a one off financial return. (flipping is
merely buying, fixing up and reselling it for as much as you can as fast
as you can, for profit).
buying to let, this type of business is
mostly embarked upon by individuals or couples, although not exclusive
to individuals or couples. the reason for it’s popularity among the
afore mentioned section of business types is due to the long term
regular income streams available over a number of years, well into
retirement in fact. with the added bonus of additional refinancing
opportunities that will present themselves at intervals when equity has
been accumulated, this is a winner all day long.
start-Up:
A
new start-up business can be anything at all, there is simply no limit
to what it can be or your plans for it. new businesses are however
notoriously high risk due to their extremely high failure rate, the
complete lack of any track record in terms past history also
tends to make all but the bravest of
investors shy away, there are ways around this however.
take over:
taking
over an existing business is possibly one of the most under rated ways
to set up in business yet is basically for the most part very straight
forward, an existing owner looking to sell may well over intensives such
as, accepting a deposit payment and allowing you to pay the remainder
by weekly installments over a number of months or years, depending on
what can be agreed.
it is not uncommon for a seller to offer more
than generous goodwill in terms of any existing stock included in the
business, this can extend to suppliers and banks by way of putting in a
good word or allowing you easier payment terms, in the form of how you
can pay them for the purchase of their business.
take over (failing business):
failing
businesses are practically given away, and as such can be a very good
way to get a business off the ground, if a failing business is one in
the same or similar field as one of interest to you, then this can be
ideal.
problems you come across with taking over a failing
business are problematic in the extreme, depending on it’s size you can
be dealing with anything from rut digging management oblivious to their
plight, to someone fully aware of their problems but unwilling to make
the necessary changes. with these types of attitude being prevalent you
will do well never to pay the asking price for any failing business.
as
a failing business is usually coming with more baggage than a luggage
wholesaler it is wise to embark on this type of venture as part of a
team of investors who are taking a punt on making it.
Banks will rarely provide financing for these kinds of deals.
sellers
under these conditions can be highly motivated, the reason is often
based on the fact that they can’t believe their luck at a chance to get
out and either make a profit or get away with minimal loss.
If
you can convince a group of investors that you have the skills to turn
around a bust or almost bust company and turn a profit, you may be
winners.
seller options:
where a business seller is willing to offer financial incentives for you to take over, there are several options.
asset
financing allows for the sell off part of the business, releasing money
for partial financing. items such as vehicles, equipment, etc are
common, basically anything owned by the business.
producing a
buyer for part of the company or its stock, or arrange a deal with a
supplier who is willing to offer special credit terms to help you in the
event of taking over a business so that their sales and yours will
continue seamlessly.
financing Options:
money
to purchase a business is available from a number of primary sources -
banks, sellers, and outside investors. Each source has its advantages
disadvantages and requirements. raising money for a business means doing
what it takes, and often involves all or some of the following: selling
assets, borrowing money from family or friends, applying for government
grants, maxing out your credit cards, using and extending your
overdraft, using venture capital, securing loan against a property
the
different sources of raising money offer multiple ways to achieve the
same result, which is to gain enough money to buy or set up a business.
combining sources and methods, and the type of business you choose to establish depends on how you best proceed.
