In tough economic times, business owners know that it’s more important than ever to keep their finances in order and to understand the best way to go about securing funding to grow.
More than two-thirds of small business owners agree that information, help or guidance with finance would be beneficial to their business. But nearly three-quarters of young business owners believe there isn’t enough information available on the subject.
Business in You, a partnership between the Government and private sector and supporters of this year’s Local Business Accelerators campaign, aims to make it easier for businesses to access information on finance.
Through its Find Finance section, Business in You can help businesses to plan, prepare, and apply for the funding they need to grow, including an interactive Business Support and Finance Finder to help assess the best type of funding for each business’s needs.
The range of options for business finance includes: Start-Up Loans, which are now available for 18-30 year-olds and come with a package of business support; Enterprise Finance Guarantee, which provides additional lending to businesses that lack the security to secure a traditional loan; and Seed Enterprise Investment Scheme, offering significant tax incentives to investors who fund qualifying small businesses.
Four out of five SME owners have no formal training in financial matters and only 20 per cent seek advice before applying for a loan. But getting advice can dramatically increase their chances of securing funding.
MentorsMe.co.uk can connect businesses with specialist business finance mentors. More than 1,000 of its mentors are current and former high street bank staff who have volunteered to mentor businesses for free.
The most important factor in a successful application is convincing the lender or investor that you will be able to pay them back. A business that presents a clear plan with projected profits, cash flow management, market research and a marketing plan, in addition to showing how the funding will be used, demonstrates that they really know the product and the market and gives lenders confidence.
Free assistance in developing a business plan is available during National Business Planning Week, to be held February 11-17 by the Your Business Matters Tour and Business in You.
Once the business begins to grow, cash management becomes crucial to success. Around 400,000 new businesses start in the UK each year, but one third of start-ups cease trading within three years and, more often than not, poor cash flow management is to blame.
Business in You, together with the Institute of Chartered Accountants in England and Wales, Association of Chartered Certified Accountants, and Ernst & Young, have produced two key resources for small businesses: A Guide to Financial Management for SMEs and the ICAEW Small Business Finance Best Practices Guide. Both are available to download free from the Business in You website.
n This article is published as part of the Local Business Accelerators (LBA) campaign. LBA is a Yorkshire Post-supported competition which offers young companies the chance to win free advertising with this newspaper and mentoring from business leaders.
Shortlisted firms will find out if they have been successful in their bid early next month.