Launch Your Venture: 5 Tips for Securing Small Business Funding
Funding is crucial for entrepreneurs looking to launch an ambitious business venture or grow an existing one. However, the process of finding sources, writing grant applications, and pitching to investors can seem so arduous and overwhelming that many people don’t know where to start.
Although securing financing in Australia can be a challenge, it’s certainly not impossible. Below are five tips for how to get started.
1. Know your funding needs
Before you start your quest to find funding, it's crucial that you know precisely what you need. If you’re working from serviced offices in Brisbane, for example, your monthly overheads will be far different from someone with a commercial office lease in Melbourne. If you work from home, your financing needs will be different once again.
To determine the level of funding you require, make a list of all the costs associated with starting or growing your business, including everything from your equipment and supplies to your operating expenses and marketing budget. This will give you a clear overview of the level of investment you need. Crucially, this is data potential investors will want to see.
2. Research your financing options
You’ll find an abundance of financing options available in Australia, including sources like:
- Government grants;
- Bank loans;
- Crowdfunding;
- Angel investors;
- Venture capitalists.
Each option brings its own advantages and disadvantages and, of course, you can pursue more than one. So research each option thoroughly to determine which will be best for your business. It’s generally also worth consulting a financial advisor or accountant, as they can help you navigate the different financing options.
3. Prepare a strong business plan
Lenders and investors want to see a concise but thorough business plan before they’ll even consider financing a business. Your plan must outline the following:
- Your company's goals;
- The target market for your offerings;
- Your marketing strategy;
- Relevant financial projections;
- A breakdown of how you plan to use the investment or loan you’re seeking.
Your business plan must also be easy to follow and filled with all the information lenders and investors need to make an informed decision.
4. Build your credit history
Your credit history is one of the most critical factors lenders will consider when deciding whether to approve your application for a business loan. So, it’s crucial to keep your credit history clean by paying bills on time and maintaining low credit card balances.
Obtain a free credit check through Experian or one of Australia’s other major credit reporting agencies, and if you notice any errors on your credit report, take the required steps to have them addressed.
5. Prepare to effectively pitch your business
Creatives are often told to have an “elevator pitch” for their project, and this is good practice for entrepreneurs too. An elevator pitch is what you use to get your idea heard, but once you’ve got some meetings lined up, you’ll need more than just a pithy one-liner that piques interest.
Learn how to create a pitch deck, and brush up on your public speaking skills. If you’re not confident in either area, consider taking online courses or finding a mentor to coach you. Get your mentor or a friend or family member to help you practice pitching your business, and have them ask questions so you can get used to thinking on your feet.
Securing small business funding can be a major challenge. However, if you go into it with the right strategy and plenty of preparation, you’re more than capable of securing the financing you need to launch or grow your enterprise.
