One crucial aspect of running a successful small business is the generation of funds – This could be initial start-up loans, grants for expansion or things like advertising campaigns. During times of economic recession, this can prove exceedingly problematic – People will be less willing to invest funds when money is short, or if there is no guarantee of a return on investment, furthermore banks may be less likely to provide loans due to the unstable economy. Despite these issues, for the savvy business owner, there are different ways to access funds providing you are creative and willing to put the effort in.
Why should someone fund your business? What is it about your business that would look attractive to a potential investor? The main factor would be having a sound business model and proving that you would have no problems paying the loan back. While this can be an influencing factor, there are other more niche reasons that would provide much more clout and positive reasoning to an investor.
Geographically based funding is a sound method and can even make it worth relocating in certain circumstances. In every city or town, there will be districts or areas that are progressing better than others; there may be some poorer areas that need redevelopment – If your business is located in one of these developing areas there could be grants available specifically to push economic growth and progress. Any business that is thriving and bringing in profit and custom to the region will be a prime candidate for funding.
There are other factors besides geographical that can affect funding; your family background, a level of education and your age could all be considered. Business Support centers in your local area will have an extensive list of different funds available; you can easily access these and check to see if you are eligible for any. Although these are quite niche and areas, it is worth the effort to investigate – Every contribution will be vital and help your business in the long term.
Industry specific funding and help
The fashion sector is no different from other industries in the sense that it has a range of dedicated funding bodies that can provide help in certain situations. Such associations include the Creative Capital Fund (London based), and the Centre for Fashion Enterprise. These give help to new start-up businesses in the industry and can also give support for things like exhibits and international work.
Other worthwhile bodies include the UK Fashion and Textile Association, Enterprise Nation, The Design Trust and Craft Central. These could all help to direct you on the right path to find funding for different projects or just give sound business advice in general that could be beneficial to your development. As with any venture, ensure you check out these bodies fully before taking action; there could be joining fees etc that may limit the impact of any benefit you could receive. Nevertheless, these organizations are not the only solution: you can have a global view of the solutions available in this Business of Fashion article.
How to make the most of the funds received
Any funds you receive should be viewed in comparison to the whole of your business, not just the specific area they have been allocated too. Often funds or grants may be given for a certain aspect of your business, not just as an amount of cash to be spent on whatever you want; you could receive funding for production equipment, or to attend a business management course for example. While these may not be directly what you are looking for, anything at this stage of development is a bonus and will provide a boost to your business in some way.
If you receive a grant for something you had not originally planned, always try to see the positive side; although you may not have received any money to buy the raw materials you wanted, you are still better off in another area of your business, and that is one thing you do not have to worry about or find the money to pay for. In terms of budgeting and allocation of funds, you can move any money saved from the grant into a different area of the business that you need to fund. A simple advice here: Don’t spend too much on a particular area, especially Trade Shows if you are a fashion brand.
Alternative Finance Models
No matter how much work you do or how many different routes you take, there could be an instance where you are struggling for funds, and in this case, you may be thinking, there is no possible way! An obscure but often effective method is to look at Microfinance. This is the process of gaining a large number of small loans of maybe a few pounds each from ordinary individuals who are interested in business. The method of Microfinance can be quite effective and there are many websites dedicated to the process.
If you are struggling for funds you could ask other businesses for help in return for a service – Maybe you can’t afford a new piece of machinery that will allow you to create a new product – You could approach a business and ask to borrow it or use it on their premises in return for a portion of the profits from any units sold, or even returns use of your own machinery if they require. People are flexible and generally kind-hearted and are more than willing to help out fellow entrepreneurs in times of hardship.