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Starting a new business can be very overwhelming and complicated at the same time. However, the plan of initiating a business is not essential. There are many other things to consider for starting a business: coming up with an exemplary idea, registering a company, business planning, and fundraising.
No doubt, starting your own business is beneficial because you can set your hours, work on the projects you care about, and control your future growth. But, the biggest obstacle in starting a business is the leap of money. Many people think that if they don’t have enough money for their start-up, their start-up is just a dream. But, it is not!
There are many different ways to get the money you want to start a business, from bank loans, crowdfunding to angel investors. Because everyone is not born with a rich elderly aunt, this is a short guide that will offer you advice on starting a business with no money in the UK.
How To Start A Business With No Money
First, to start a business, you have to do a lot of research, and your brain might look like a junkyard for a while, but that’s okay. For starting a business, you have to start small and scale up gradually.
Entrepreneurs and new businesses have been the essence of the UK’s economy, and so there are numerous options that you can avail yourself of to pay your start-up costs. A little money as personal savings can help, but it doesn’t matter if you don’t have a single penny with you unless and until you have a great business idea. So, to start a business with no money in the UK, you can take the following steps-
A Loan From Your Family And Friends
If your family and friends support your business idea and are willing to invest in it, then taking a loan from them is a perfect way to start your business.
Although many people hesitate to get into a business with their loved ones, if it is a small, short-term loan with clear repayment expectations, it will help you initiate your business plan. This will also give you more time to find permanent funding once your business has started to make money.
A Business Loan From Bank
Getting a business loan from a bank is one of the most popular options for businesses that require start-up money. Banks offer many types of loans, but the most common one is the unsecured business loan. Because in the business loan, you don’t have to put any asset as collateral against your loan.
However, the interest rate of such loans can vary depending on the lenders. So, it’s essential to do some research before making a decision. Some lenders also provide additional benefits such as free advice for working with a small business. Also, if you have been in a business field for a long time, you must have some other companies with credit histories, then it’s possible to get a loan at better interest rates with the help of business overdrafts. Plus, you can put your house, vehicle, or other favorable items as collateral on loan.
Crowdfunding is an excellent way of getting the money you require to start your start-up without giving away any equity. And if crowdfunding becomes successful, then there can also be free marketing for your new business. Crowdfunding can be of different types- reward-based and debt-based.
Reward-based crowdfunding is done by giving small rewards in return to people who are supporting your idea. While debt-based crowdfunding is a bit more complicated than the previous one, it is also lucrative for both investors and businesses.
In debt-based funding, the company that receives funds from backers will owe them money once they start running. The whole idea is that as you grow high, the sharer prices will increase and give your initial crowdfunding investor a potential profit. Whichever option you choose, make sure to do thorough research before initiating any crowdfunding campaign.
An angel investor is an affluent individual who provides money for new and growing businesses. But, in return, the investor will get offered the ownership equity in addition to the future profits or revenues from running the business.
The main benefit of collaborating with an angel investor is that they give high-risk funding with many terms and conditions since they are willing to take part in a risky investment in the hope of more significant profit returns later. However, one should be selective while choosing an angel investor as there are some drawbacks if you have made the wrong choice.
One more additional benefit of having an angel investor onboard is the tax exemptions, no credit checks or collateral assets, flexible payment options, and the benefit of getting business advice and mentoring.
As I said earlier, there are too many things to consider while starting a new business, but all such items require money. If you don’t have start-up money, don’t give up on your plans because many other financing options exist. As long as you have a great business idea, you will secure the funding you want to start your business. We hope that this article on how to start a business without money in the UK will help you establish your business start-up to make money soon. Best of luck!