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Startup Finance – 5 Fantastic Alternatives to Bank Loans

 

 

Have you considered these options for financing your business?

loans

For the majority of aspiring entrepreneurs, bank loans do not qualify as a feasible finance option simply because they do not offer enough to secure the borrowed amounts. With lack of initial capital to start a business, how are new entrepreneurs supposed to incubate their ideas and grow thriving businesses?

Here are 5 financing alternatives to bank loans that new entrepreneurs can look into.

1. Venture Capital

Venture capitalists usually invest in a particular industry. They put their money to help kick-start and boost new businesses that exhibit high-risk and high-growth potential. This channel of business finance is ideal for businesses that have a solid exit strategy with a fast-growth plan – these startups can obtain substantial amounts through venture capital to grow and network the business.

2. Invoice Factoring

Funding is not just required to start a business. One needs finance to keep the business running. Invoice factoring makes sure small businesses have the working capital they need to keep the business operations running smoothly. An invoice factoring service usually pays an upfront amount on billed out invoices. This amount can then be returned when the business actually receives payments for the same invoices from their customers. So even with the outstanding invoices, the business does not come to a halt.

3. Crowdfunding

Another interesting way to raise finance for your newly established business is through crowdfunding. Sites like Indiegogo and Kickstarter pool small amounts contributed by various investors into an investment pool that can provide a boost to small businesses seeking finance. This ultimately eliminates the need for businesses to look for one single investor willing to invest a big amount of money in the venture.

When picking a crowdfunding site, make sure you thoroughly read their fine print and know the terms and conditions applicable to the arrangement.

4. Government Grants

Startup businesses can also explore the variety of government grants available for promoting small businesses. These are usually unsecured, cheap loans that don’t require payback. This makes them a great medium of raising finance for startup ventures. The only catch with these loans is that the qualification criteria are quite stringent. Since these grants are far and few in number, one needs a robust business plan to be eligible for one.

5. The Incubators

Incubators act like nurturers for small, newly established businesses. They provide businesses with necessary facilities and office space on a shared basis. Incubators are usually funded by a private equity fund. In addition to the office space, facilities, and monetary finance, incubators offer seasoned mentors (industry experts and entrepreneurs) to promote group communication and learning.

Normally, incubators continue to support small businesses for as long as they wish to stay in it. However, once a business grows enough to sustain and prosper on its own, they can move out and set a pace for a solo flight. Incubators can be great financing options for businesses looking to build networks, obtain finance, and jumpstart their enterprise.

Setting up a startup business can be challenging. However, once you have the finances sorted out, you could opt for professional help to make things easier for you.

For professional help, get in touch. If you found this information useful, let us know! Feel free to share it so others can benefit too.

 

We can offer you more guidance when you call Les’ Hotline:  07732090847, les@akbook-keeping.co.uk.

 

5 Compelling Reasons to Hire an Accountant for Your Tax Matters

Why you should engage a professional accountant.

Tax is complicated. Filing tax returns can prove to be a stressful and traumatic process when you’re not aware of the process and the laws and regulations that govern it. In most cases, owners of small and medium businesses don’t know much about tax. This creates a number of problems for the business and the owners.

There is a simple solution to these problems – hiring a professional accountant’s services. However, most business owners are reluctant to do that, mainly because they are unaware of the following advantages that an accountant offers:

tax

 

 

1. They Know the Laws and Regulations and They Comply

The HMRC has a detailed set of compliance requirements for all businesses and tax payers. Often new businesses are unfamiliar with them or the way to navigate them. The accountant knows the law. They know what HMRC wants and requires and what’s the best possible way to get that done to honour compliance and legal requirements. It’s their job. It’s what they do best, and as a result of their expertise you don’t have to worry about it  a moment longer.

2. Reduced Tax Liability

No, we are not referring to any sort of tax avoidance or tax evasion. A professional tax accountant can counsel you on tax efficient methods of business operations. This can allow you to save a considerable amount of money that is otherwise paid as tax to HMRC. With their expertise they can advise you on the most efficient use of tax incentives and business support schemes given your business’ current circumstances. They can help you understand the tax process better and save you money through that knowledge, too.

3. Tax Planning

Tax planning is important. It is this planning that allows a business to keep up with its tax obligations through efficient utilisation of the resources available to it. The accountant can help your business with proper tax planning. This may include making arrangements with the HMRC for deferred payments in times of difficulty or setting aside tax money for later payments when the cash flows are healthy.

4. You Know Exactly Where You Stand with the HMRC

When your taxes are being handled by an accountant, you can count on being up to date with your tax obligations. This includes payments, filings, refunds, and even accuracy. There are times when HMRC makes mistakes too. These mistakes might not be obvious to business owners, but accountants are trained to check for and organise the business’ taxes properly.

5. Saves Time

Tax isn’t easy to understand. Although HMRC provides comprehensive guides to help taxpayers understand the system – they are much too detailed for small business owners to spend a large amount of their time reading and understanding them. That time could be better spent on ironing out business plans and growth strategies instead; and that is possible when you have a professional tax accountant handling your tax affairs.

Whether it’s personal tax returns, tax calculations, submitting VAT returns or other business taxes, a professional accountant is your best bet for a worry-free solution.

For professional help, get in touch. If you found this information useful, let us know! Feel free to share it so others can benefit too.

We can offer you more guidance when you call Les’ Hotline:  07732090847, les@akbook-keeping.co.uk.

 

Launching a Start Up Business?

Launching a Start Up Business? Spare a Thought For These!

Is this the first time you’ve tried to set up your own business?

Whether the answer to that question is ‘YES’ or ‘NO’, there are certain things you need to know about start up businesses. The life of an entrepreneur is more or less like a roller coaster. There are highs and lows to it, but the best part is that it all comes with valuable lessons. Start up businesses that succeed – there aren’t many – are usually the ones that learn from their experiences.

Establishing a start up business in Huntingdon, Peterborough, or somewhere else in the UK is a not an impossible feat. The process is rather simple. However, before you get to the process of setting up a new business, there are a number of things you need to iron out and these include:

The Business Plan

There is a common misconception among amateur entrepreneurs that a business plan is only good for obtaining finance. While obtaining finance is one of the main objectives of drafting a business plan, it is not the only thing you need it for. You need to understand that starting a business requires a vision that ultimately converts into a series of goals your business sets out to achieve, but without the path that leads to these goals, how do you plan to accomplish them? It is easy to come up with an innovative business idea – however, unless you can execute the idea well you don’t stand a chance of succeeding. Your business plan is the execution strategy that maps out your route to achieving your goals.

The Focus

Having your focus on the right things is crucial. You can’t be operating a business in 2016 based on the market principles and business strategies you succeeded with back in the year 2000. Business environments and industry dynamics are forever evolving. You need to keep abreast with the latest developments and integrate them into the structure of your business to keep it focused and steady – and you need to do all this before starting the business. Focus on one industry, one market niche, and one product/service when you begin. Once you get a strong foothold in the market, there will be plenty chances to diversify!

The Anchors

A number of start-up businesses employ friends and family in key positions in the business. They’re the ones you trust most and there’s no harm in that. However, the same family and friends may at times become anchors that weigh you and your business down. For example: you hire your best friend to manage your accounting and bookkeeping. A few months into the business you realise they have begun taking the position for granted and are proving to be a bad fit. What do you do? You pull the plug and look for better alternatives like a professional bookkeeping service!

As minor as these considerations may seem – they matter. Time and again they have proved to be the difference between a successful start up and one that couldn’t survive even as long as the first 5 years.

Let’s not sugar coat it. The idea may seem intriguing and the process may be efficiently handled with professional assistance, but setting up and running a business is not everyone’s cup of tea. It requires resolve and commitment; above all it requires the drive that forces you to stand up after every fall.

For professional help, get in touch. If you found this information useful, we’d love to know! Feel free to share it so others can benefit too.

If you are in a start up situation and need some questions answered call Leslie Wells for personalised, professional advice. Call Les’ Hotline: 07732 090 847 to get in touch with him.

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