Small businesses are all about having a great idea, spotting a gap in the market and putting yourself out there. There are great rewards from taking the plunge and realising your dream, but for many people it may not be possible to cope with the initial cost outlay of setting up without receiving assistance through finance.

This can be the most daunting part of setting up your own business. It’s make or break time. You’ve got your idea in place, but you need the bank to back you. In the current financial climate, it’s much more difficult to secure loans from banks, so now more than ever you have to be accurate and concise with your finances. Here are a few pointers to help you along the way.

• Negotiating for money is just as important as making sales once your business is up and running. With that in mind, treat negotiating for money with the same planning and thought as making a sale.
• When you go into the meeting with your bank manager, make sure you have written a full business plan, taking into account all projected forecasts and costs your business could face. Make sure you know it in and out, as they will ask you those tough questions and will not be impressed if you falter.
• Make sure you ask for the right amount of money from the outset; it will be very difficult to go back for a second time and ask for more money.
• You may think you don’t need a loan and can just use an overdraft on your business account. This is a short term solution; long term finance is provided by a loan or through selling company shares.
• You don’t have to just go to the bank to secure finance, however. Money can be raised from private individuals or companies, venture capital funds, charities or local authorities.
• In most instances you will need to invest as much as an outside investor. In only a few instances have individuals managed to put in less than an outside investor and still retain control.
• Securing loans on your house or giving personal guarantees is a major step, so don’t do it lightly or without discussing it with those closest to you.

You’ll need funding for a variety of different things such as stock, premises, staff and insurance for small businesses. You can move funds around and set different standards for different areas, but you should never skimp on business insurance. If you don’t have this in place and something goes wrong then you could face significant legal costs.

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