Getting funding is now easier than it is has ever been, but over funding is just as bad as not having enough funding to get started. So, keep reading to find out how to go about deciding how much your business actually needs, as in most cases you may only need £2600 to get started.
Don’t get overboard
The funding process for any startup can be complicated, no matter how much you are applying for. You have to work presentation, business plan and research, research, research. There are many funding options out there and the pressure may differ, but end result will remain the same – the business model has to make sense and has the potential to be successful.
This may sound painstaking, but it may be the best decision you ever make for your business – you will be improving each area you work on without realising. So, rather than keeping your eye on the funding you need, focus on the development of your business and what then assess what you can do with £500 first before you measure what you can do with £6000.
You become distracted
Once you have gotten your business going, your customers will expect the same level of interaction you started off with, if not more. Preparing to fund your business can distract you from what your customers need from you and eventually they will get bored and go elsewhere. This is even more possible if your startup is currently being run by yourself.
The importance of having dedicated customers who have invested into your dream is just as vital as receiving thousands in funding for your business. Never keep your eye off the ball. Yes, you can always create bigger marketing campaigns to reach a wider audience, but loyal customers are worth much more than a few Facebook page likes. These loyal customers will share your post, recommend your product and come back every time they need something you provide.
Losing your brand image
If you decide to go down the investment route, you are opening allowing your brand up to others who will have a say in how your brand image is sold to your target audience. The finance will be fantastic, but the control you have over how you communicate with your current and potential customers will decrease as you will have one or more stakeholders voicing their own ideas.
This is a lot to handle, especially if your business is still in the startup stage – you may lose the freedom you had to be creative with your approach. It’s better to have control of your business until it is necessary to allow other ideas to affect how your brand is viewed by your target audience.
Less time to learn
Short cuts are easy to make when you have lots of money to spend. Instead of getting on the ground and figuring things out yourself, you may be tempted to skip the lesson and hire others to make these decisions for you far too early on in the process. These big steps may mean you avoid your customer’s feedback and work off your own ideas of what they need.
You may end up spending thousands on developing an idea, locked away from the public – but miss out on what your customers need. Your idea may end up being your depiction of perfection, but unless you have an audience it would have been a waste of time and money.
Getting a ready for market, but not perfect product is always better than waiting on perfection. Once it gets on the market, you will receive valuable feedback to improve on your product and make improvements that your customers will jump at buying – more so because they may feel as though they had a part to play in the growth of the business.
Overfunding can result in money wasted
Having a small budget isn’t a bad thing, you are forced to be creative and think yourself out of any problem - rather than just throwing some money at it.
We all want to be comfy and have plush furniture and unbelievable work spaces, but that all adds up. Free lunches for your staff is always a plus, but not every week – it adds up you could end up over treating your staff out of a job. Don’t waste money on what you don’t need, it may feel nice, but that money has to be accounted for soon enough.
The smaller the budget the less you splurge and waste money on things you do not necessarily need. You are forced to focus on your priorities and when you do have millions to spare, you will be more educated on how to manage your money. Yes, it doesn’t hurt to treat your staff, but manage this well.
Funding has always been a hurdle for startups, but you do not need to be a millionaire before you can really get going and get rid of your 9-5. It is all about managing each stage in steps, with small doses of capital here and there until you are ready to commit full-time. At Smarta Startup Loans we help you to work through your business plan, with our dedicated support team. A business plan is important for any business, even if you are not planning on applying for funding. It teaches you how to write a marketing plan, budget your costs and research into who your target customers are and how you can ensure they come to you.
In the end it’s much easier than you think to get started and we are here to help. Our funding starts at just £500 and it could be in your account within 2 weeks – plus you will benefit from having a mentor to bounce ideas around when you need guidance. Mentoring is still priceless for any business and you can have one for an entire year when you apply for any amount.
To register for our Smarta Startup Loans funding, click here to get started.