8 creative ways to fund your business

8 creative ways to fund your business

Whether you’re a start-up, or you’ve been going for some time in order to grow or kick-start your company you’ll need funds. I reckon if you want to open a retail (interiors) store you’ll need on average about  £100,000. Add another 100K if you’re on the high street like us where rents aren’t even funny! You can do it for less  of course but don’t under estimate what you’ll need is what I am trying to say. We did and it really slowed us down in the beginning. Obviously it depends on whether you are bricks and mortar or online (but as I mentioned before don’t let online lead you to thinking you hardly need any dosh) it’s the biggest mistake you’ll ever make and the reason so many onliners fail!

You need to invest in your business online or otherwise because this is your business not a craft project or hobby where you build the website yourself and man the phones and send out orders and write press releases and market it and do the finances – you’ll need help – right!


Help costs.

8 out of 10 business fail, crash and burn in the first 18th months and the reason – because they have simply run out of cash – so you need to factor in more than you think!


Here are some ways to get some cash


Have you guys heard of factoring? It’s where a third-party buys your debt. It’s a $150 billion industry in the States and works if say you’re invoicing clients after you have provided goods or services to them. For example the catering company that we use for our design school has gone with a factoring company, they chase us for invoices not the caterers. Juicy Couture who I’m reading about at the moment might provide clothes to say Macy’s who would expect an invoice a month in some cases 3 moths after receiving the goods. Obviously that can screw up cash flow. A lot of the big department stores /retailers pay 3 months afterwards and yet for people like Juicy who still have to pay suppliers, wages rent etc. that is a disaster. We don’t do much business with retailers who delay payment systems as that has seriously screwed us in the past, which is why factoring companies are great if you’re doing it a lot. Except be mindful of the interest you’ll get charged.


Pool your assets

Any family jewels in the loft, anyone you can kill off? Nope then consider a home equity loan. Be careful though you have to make those payments otherwise the bank could nab your house. If you’re serious about your business however the thought of borrowing against the house shouldn’t (easy to say I know) cause you not to go and do it because you’re going to make it work right. I remember years ago when we had just borrowed against the house & Graham came home early one morning having lost his job in the city I honestly thought that was the end. No salary from him, a double mortgage to pay and no way out I was fraught with anxiety. You know what though if I’m honest I had it too easy before with his salary.  Not that I was complaisant before but there wasn’t the same fire in my belly I wasn’t pulling people off the street with a fishing rod ‘reeling them into the store to come look, come spend! It made me fight; our business was going to work or fail if it failed we would lose the house. We fought! I changed the displays more regularly, I put things outside, I mail blasted out, I was in fight mode I was not going to lose the business or my house. I wasn’t and we didn’t, it made us stronger!


Angel Investors/Venture capitalists

Angel investors finance new businesses with the likelihood of high growth, new restaurants, bars etc. Not worth approaching if you’re a small fish. Also remember you’re giving up control of your business to someone else anything from 10% to 50%. Yikes! My problem with angel investors is the ceding of authority problem – unless they really are angels and hand over the money and shut up for ever, no phone calls, no emails, no opinions – nothing. I keep reading about so many pitfalls with investors the minute they get involved is the minute your business changes. Obviously you have to listen to them they are you’re partner and they bring a lot to the table apart from just money. Whether that works for your business is up to you. I work best when I listen to nobody  – that sounds super prima donna ish no?
Crowd founding

Crowdfunding is a way of raising finance by asking a large group of people for a small amount of money using the Internet to talk to thousands if not millions of potential funders. People invest in you because they believe in the cause (you give rewards like vouchers, tickets etc.). One reason apparently that many people don’t reach their target is because they’ve gone in too high. Set a reasonable target you can always do another round of funding later.

Debt crowdfunding is where investors receive their money back with interest – this is also called peer-to-peer lending. There is also equity crowdfunding where people invest in an opportunity in exchange for shares or a stake in the biz!




This is where you can swap products or services and barter like the old days.  The US Department of Commerce believe it or not estimates that 25 per cent of the world’s trade is still done this way. There is even such things as Barter exchange other Barter sites include Bartercard (national versions as well) & U-exchange (national versions as well)


Private loans from family/ friends

Butter them up I say, interest rates are lower, they are more flexible, friendlier and won’t need such an airtight business plan with financial statements and monthly board meetings!


Credit cards

Maxing out your credit cards is probably the worst thing you can do – as tempting as it sounds with that instant line of credit anything from £10,00 to £50,000. No loan application forms or business plan forms to fill out you just swipe away. It’s the high interest rates that are a killer if you can pay it back quickly do it, if you can’t back away, immediately away.


Bank loams

Banks are lending again yay hay, the thing to remember however is that often banks will require collateral or other assets that they could then seize in the event of a default (i.e. your house). With fixed interest rates, fixed monthly payments it feels just like a mortgage.  Great another one!


Oh and don’t give up one of my favourite business books “Anyone Can Do It by Sahar and Bobby Hashemi went to something like 20 banks before they got a yes on a loan. There’s no free money, governmental or otherwise. Be realistic you’re going to have to put things on the line as you’ll unlikely pull an investor with no history or track record, but you can and you will get funding. Don’t be put off by the first no is all I’m saying!

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