Types of Business Finance – Grant Finance

Whether your business is small and new or large and established you will need adequate finance for the majority of projects, purchases and expansions you’re your business makes.

Obtaining the necessary cash to get your business off the ground can be a challenge and few new companies are able to finance themselves on cashflow alone and therefore need to consider gaining finance from other external sources. There are many of these external sources who will be willing to provide you with this start up finance, a few examples of these are stated below:

• Bank loans
• Business angels
• Venture capitalists
• Overdrafts
• Credit cards
• Friends and family

These are just a few examples of some of the places that business start-up finance is available from; however there is another source of business finance available that many people often seem to forget, this is grant finance. Business Grants can however take several months to process so you should always add extra time to your planning so that you get a decision on your grant application before the project is due to start.

A lot of start up companies and small businesses are often put off the idea of applying for a business grant to help them with their finances and because of this many of these businesses are missing out on a great opportunity to gain extra cash for there business; cash that doesn’t need to be paid back.

Few, if any new companies can finance themselves on cashflow alone and therefore need to consider raising finance from other external sources. If your business needs extra cashflow for a specific project or purpose then a business grant could be exactly what you need. This is because business grants are only awarded for specific aspects. So what exactly is a business grant? A business grant is when an organisation or authority gives a sum of money to your business to help you succeed in a particular project these business grants are mainly awarded by the Government at both a local and national level as well as by smaller bodies such as The Princes Trust or The Arts Council.

When you are applying for a business grant there are certain things that you should keep in mind such as a detailed description of the project, an explanation of the potential benefits of the project, a detailed work plan, details of your own experience and if possible a business plan. All of these will help you with your application process and help you to get closer to that business grant that you want.

If you are successful in your grant application the money that you receive is none repayable and you won’t have to pay any interest for it either; however you will need to carry out a significant amount of hard work if you want to stand a chance of obtaining a grant. These grants are also limited so the competition that you will face for them is intense.

Helen is the web master of Angel Start-ups, experts in all aspects of Business Finance and Business Grants.

What does your Business Plan need to include?

Your business plan is a document that needs to be accurate and realistic. Your plan will detail everything that your business does, where is stands now, what you hope to achieve with your business, your target market, your unique selling point and all of your financial forecasts for your business. These are just a few of the aspects that you should cover within your business plan so that whoever is reading it can gain a clear understanding of everything that your business is and everything that your business focuses on.

A business plan is a formal statement of a set of business goals, the reasons why they are believed attainable, and the plan for reaching those goals. It may also contain background information about your organisation.

Business plans are decision-making tools. There is no fixed content for a business plan. Rather the content and format of the business plan is determined by the goals and audience. A business plan should contain whatever information is needed to decide whether or not to pursue a business goal.

You also need to ensure that your business plan is up-dated on a regular basis as it is a living document, you need to make sure that when something changes within your business that it is documented within your business plan. This will allow you to keep track of your businesses development and will ensure that you know what is happening in your business from start to finish.

Preparing a business plan draws on a wide range of knowledge from many different business disciplines: finance, human resource management, intellectual property management, supply chain management, operations management, and marketing, among others. It can be helpful to view the business plan as a collection of sub-plans, one for each of the main business disciplines.

Within your business plan you should define your business position and your market. You need to outline your competitors and include any market research that you have conducted. You should be fully aware of your marketplace and understand the trends that happen within it. It is also a good idea to know what your competitor’s advantages and disadvantages are and then compare these to your own.

You need to think wisely about how to go about writing your business plan and ensure that you have covered all of the topics that you need to address within your plan. As well as this you should also consider the presentation of your business plan. You need to make sure that your plan is legible and wrote in an email friendly format so that if you do have to email your plan you can do. A cover and content page is also a good idea for your plan, which should include page numbers and section numbers. Once you have wrote your plan you should get at least two people to read through it to make sure that they understand it whilst checking the grammar and spelling.

Your business plan may seem like a complicated task but when you think about it, it is mainly common sense, just take your time with writing it and you will be fine.

Helen is the web master of Angel Start-ups, specialists in all aspects of writing and preparing Business Plans.

How to write a Business Plan

A business plan is essential to your business and must be realistic. It is a written statement of intent that describes your business, its objectives, strategies, market and financial forecasts.

Many people only see a business plan as a way of securing external finance for their business when in fact it should be used for so much more. There are so many benefits that a business plan can bring to your business, such as securing external finance but also for more personal business reasons such as helping you to spot potential pitfalls before they happen within your business, structuring the financial side of your business efficiently and focusing your development efforts as well as working as a measure of success within your business.

As well as helping you in many areas of your business your business plan is also wrote for a variety of potential audiences. There are many people that may want to look at your business plan; banks, investors, grant providers, anyone interested in buying your business and potential partners make up just a few of the people who may wish to see your business plan. It is because of this that you need to ensure that you outline everything about your business in a clear and simple manner. Remember the person who is reading your plan may not understand your business and the products, services or processes that your business is offering, due to this fact it is important to try and avoid using jargon and it is also a good idea to get someone who isn’t involved in your business, for example a friend or family member to read through sections of your business plan to make sure that they understand what your business is about and what it hopes to achieve.

Within your business plan you need to set out your vision for your new business, this includes who you are, what you do, what you have to offer and the market you want to address. You also need to include an overview of your business as well as describing your products or services. Some of the key areas of your business that you need to include are:

Your market, which includes its size, historical data about its development and key current issues
Your target customer base such as who they are and how you know they will be interested in your products or services
Your competitors including who they are, how they work and the share of the market they hold
The future, including anticipated changes in the market and how you expect your business and your competitors to react to them

Although your business plan needs to be used for more than financial forecasts, it is this area that remains the biggest within your business plan. In this section you need to translate what you’ve said about your business into numbers.

Your business plan needs to cover the next three years of your business but the first 12 months should contain the most detail.

If you are hoping to start up your own business it is essential that you start work on your business plan straight away to give yourself the best possible start.

Helen is the web master of Angel Start-ups, experts in all aspects of Business Plans.

Business Finance – Gaining a Business Grant

Every new business needs finance when they are first starting up. You will need to buy equipment and your workplace will need to be set up as well as all of your marketing costs being sorted out but it doesn’t just stop here; when you are officially set up and your business starts making money you will need to cover all of your businesses bills and your staffs wages.

When it comes to finance needed to establish your business there are a number of options available to you. One of these options is grant finance. So what exactly is this grant finance? Grant finance is some of the money that is given to individuals or businesses for a specific project or purpose.

Grant finance however only covers part of the cost involved in your business project but the money that is given to you doesn’t need to be paid back. Grants are given to businesses to help with specific aspects of business development and they are available from a wide range of sources such as the Government, European Union and regional development agencies. These business grants are only given to businesses for a specific reason and there are a number of factors that may affect whether you are able to gain a grant such as your business activity or your specific business industry sector, some are also linked to certain geographical areas, which are in need of economic regeneration.

Business grants are notoriously hard to gain and there are only a certain amount that are available to businesses every year so the competition for these business grants is strong, which is why if you are hoping to gain one you need to clearly outline what the grant will be used for and how it will benefit your business as well as how it will benefit your local community. You will also need to clearly show that the specific project you want the money for hasn’t already started to take place and that you are able to put the rest of the money needed for your specific project to the grant money because, as mentioned earlier, a business grant only covers part of the money needed for a specific project.

A business grant will cover between 15% to 50% of the total costs involved in your business project so you will need to get hold of the rest of the money. If you gain a business grant when you don’t have the other half of the money available or you have already started the business project then you will be made to pay the grant back in full as you are breaking the terms of your business grant.

If you are hoping to make an application for a business grant then you need to make sure that you check what grants are available. Also there are a few factors that could affect you gaining a business grant such as the size of your business. Some grant providers will only give you access to a grant if your business is a small to medium business, ideally with less than 250 employees. As well as the size of your business you also have to think about your industry sector. This is because funding can often be limited and subject to restrictions in certain sectors, which are defined by the European Commission. Other restrictions include the location of your business and the purpose of your grant.

If you are going to apply for a business grant it is advised that you make your application well in advance of when your grant is needed as the applications can often take a while to process.

Helen is the web master of Angel Start-ups, experts in all aspects of Grant Finance.