As part of the Government’s pledge to reach net-zero by 2050, almost £5bn has been put aside to help UK businesses become greener. There are small business energy grants covering everything from installing heat pumps and electric car charging points through to adding solar panels or just insulating your building.

These are available either nationally, regionally or at local authority level, so check out our list below.

Where to find green small business grants – If you fancy making your business and its operations that bit greener, these eco grants will help you get there

United Kingdom

Workplace Charging Scheme

The Workplace Charging Scheme (WCS) is a voucher-based scheme that provides eligible applicants with support towards the upfront costs of the purchase and installation of electric vehicle (EV) charge points.

It is available in England, Wales, Scotland and Northern Ireland, but not in the Channel Islands or Isle of Man.

The grant covers up to 75 per cent of the total costs of the purchase and installation of EV charge points (inclusive of VAT), capped at a maximum of:

• £350 per socket
• 40 sockets across all sites per applicant – for instance, if you would like to install them in 40 sites, you will have one socket available per site

After applying using the online application form, successful applicants are issued with a unique identification voucher code by email, which can then be given to any OZEV-authorised commercial charge point installer.

England and Wales only

Boiler upgrade scheme

What is it? With this scheme, you can get a grant to cover part of the cost of replacing fossil fuel heating systems with a heat pump or biomass boiler.

£450 million of grant funding is available over three years from 2022 to 2025.

You’re eligible if:

• Own the property you’re applying for (including if it’s a business address)
• Be replacing fossil fuel heating systems (such as oil, gas or electric)

How much? You can get one grant per property. Grants are available for:

• £7,500 towards an air source heat pump
• £7,500 towards a ground source heat pump (including water source heat pumps and those on shared ground loops)
• £5,000 towards a biomass boiler

Your property must have a valid Energy Performance Certificate (EPC) with no outstanding recommendations for loft or cavity wall insulation.

How to apply

• Contact suitable MCS certified installers to get quotes for the work
• Confirm you’re eligible (your installer will tell you)
• Agree a quote with your chosen installer
• The installer will apply on your behalf on the Ofgem website

The value of the grant will be taken off the amount you pay for installation.

Solar panel grants for businesses – If your business uses solar panels, you can generate cash from National Grid suppliers for the energy you produce and do not use

England

Birmingham

Commercial vehicle grant

What is it? This £10m grant scheme aims to help small businesses based within the Birmingham Clean Air Zone (CAZ), wider Birmingham and West Midlands region to meet European standards.

Who can apply? You must have been trading for more than 12 months and own or lease heavy goods vehicles or light good vehicles that are not complaint with CAZ emission standards. You must also be able to demonstrate your use of clean air zones through your commercial operations.

How much? The total grant package for each business is up to £180,000 – that’s up to £15,000 per heavy goods vehicle and up to 35 per cent of the maximum cost of an upgrade up at a maximum of £4,000 for each light goods vehicle.

How to apply You can find out more and register here.

Derbyshire

Green Entrepreneurs Fund

Green Entrepreneurs Fund helps businesses, organisations, communities and individuals interested in developing skills in the green economy and investing in green energy and carbon reduction schemes.

Green Entrepreneurs Small Grant Fund

Grants of between £6,000 to £20,000 are available for proposals for alternative energy, clean fuel and carbon reduction projects.

To be eligible, projects must have a minimum spend of £15,000 and there is a maximum intervention rate of 40 per cent. A total of £500,000 has been set aside for this fund.

Green Entrepreneurs Demonstrator Grant Fund

£1.2m has been earmarked for a small number of high-quality, larger scale carbon-cutting projects in Derbyshire. This fund is open to larger scale projects that are designed to encourage solutions beyond the mainstream of current thinking.

The maximum grant available through this fund is £200,000.

Green Entrepreneurs Scholarship Fund

This fund will support individuals to retrain with skills to enable them to enter the field of low carbon, green energy. Individuals can access up to £1,500 for training costs. £100,000 has been set aside for this fund.

The scholarship grants will allow individuals to study around their existing responsibilities. It will enable them to obtain the skills and qualifications they need to change their career or progress in employment. The study can take place either online or face to face or a combination of both.

Applicants are encouraged to contact the careers service and discuss their plans before applying for a green entrepreneur programme scholarship grant.

East Sussex

Energy efficiency grants for East Sussex businesses

What is it? An SME may apply for a grant between £200 to £1,000 to cover a maximum 40 per cent of the total value of their energy efficiency project through the Sustainable Business Partnership CIC.

The minimum grant amount you can apply for is £200 with a total project spend of at least £500

Who can apply? The grant is available to any business, social enterprise or charity that:

• Has fewer than 250 full time equivalent employees
• Has a turnover less than £44m
• Is not owned by a group or company that does not meet the above two criteria

To apply for a grant the SME must also have:

• A premises in East Sussex (excluding Brighton & Hove) where the energy efficiency project will be installed
• Received an energy audit to identify energy saving measures; provided through the LoCASE project, or through a similar scheme or a private supplier.

How to apply You can download an application form below.

Download Application Form

To apply for the grant please email your completed application form and supporting documents to info@sustainablebusiness.org.uk.

Greater Manchester

Carbon Reduction Grant

What is it? SMEs in Greater Manchester may be eligible for grants between £2,000 and £25,000 (before VAT) to cover up to 50 per cent of the cost of energy efficiency improvements up to a maximum grant of £12,500.

The Carbon Reduction Grant is available for a limited time on a first-come-first-served basis and can go towards, for example:

• A new LED lighting system for your premises
• Heating equipment upgrades
• Replacement drives or motors
• Process efficiency investments

How to apply If you’re eligible, fill out the form in the link here

Norfolk and Suffolk

Business Transition to Net Zero Grant

What is it? The Business Transition to Net Zero Grant is aimed at businesses in Norfolk and Suffolk with ambitions to reduce their carbon footprint and increase productivity.

Grants between £25,000 and £100,000 are available, covering up to 20 per cent of the cost of the development. To be awarded the minimum of £25,000, you must show total project costs of at least £125,000.

What it covers The scheme funds capital development, such as those which make use of clean and/or renewable energy production and the recycling of goods and materials, rather than the installation of LED lighting or the supply or installation fo solar panels.

Who can apply Businesses based in Norfolk or Suffolk that have at least two years’ worth of accounts.

How to apply Contact New Anglia Growth Hub

Nottinghamshire

Workplace Travel Grant

The Workplace Travel Grant offers small businesses in Nottingham up to £25,000 financial support to help meet the costs of workplace travel improvements such as electric vehicle charge points, cycle parking, showers, pool bikes, car sharing and car parking management.

Businesses in Nottingham have until 31 December 2023 to apply here.

Worcestershire

Net Zero Worcestershire

What is it? Grant funding available to help SMEs in Worcestershire to implement energy saving initiatives including LED lighting, heating and insulation and renewables.

How much?

Bromsgrove: £1,000 to £10,000

Malvern: £1,000 to £8,000

Redditch: £1,000 to £10,000

Worcester: £1,000 to £5,000 (revenue grants only)

Wychavon: £1,000 to £5,000

Wyre Forest: £1,000 to £10,000

Net Zero Worcestershire grants are awarded on a match-funded basis, meaning the SME will need to provide at least 60 per cent of the total cost of the project.

What can the grant be used for?

The grant can be used to fund a variety of business activities, including, but not limited to:

• lighting
• compressors
• insulation
• fast-shutting doors
• renewable technology
• heat recovery
• heaters and boilers
• energy efficiency equipment that leads to process improvements
• energy management

How to apply Email grants@worcestershire.gov.uk

Yorkshire

Hull Business Energy Efficiency Scheme

Funding of up to £15,000 for SMEs based in Hull towards replacing inefficient systems and equipment, and installation of new smart systems to help save energy.

• Lighting
• Heating
• Solar panels
• EV chargers

How to apply You can apply here.

Scotland

East Ayreshire

Net Zero Grant

The East Ayrshire Net Zero Grant provides up to 50 per cent funding, up to £3,000, to support local businesses to transition towards net zero carbon emissions and also help offset the current rises in energy costs.

The fund is intended to help small to medium-sized businesses (SMEs) to implement energy and resource efficiency improvements. It can be used for:

• The purchase of equipment that would contribute to energy saving
• Green skills training
• Renewable energy installations (for example, solar, ground or air source heat pumps)
• Waste management or recycling
• Lighting systems
• Roof and building insulation
• Low energy heating

To be eligible, a business must:

• Have been trading for at least 12 months
• Employ between three and 49 people
• Be working with Business Energy Scotland or the University of Strathclyde
• Have completed a business energy efficiency audit and created a carbon reduction plan

Falkirk

Energy Efficiency Fund

The Falkirk Council Energy Efficiency Fund can provide grants to cover up to 50 per cent of your project costs, with a maximum of £10,000 per grant. The minimum grant value is £1,000, which means your project must cost at least £2,000.

The fund can be used to make changes to business premises and business operations to reduce their carbon footprint from energy consumption. This might include:

• Changing to a low carbon heating system
• Installation of low and zero carbon generating technologies, such as solar PV, biomass and micro-wind
• Building fabric upgrades such as insulation, energy-efficient lighting, draught-proofing, double or triple glazing

Before you begin your application, you will need a record of:

• The trading name of the business
• The number of employees, your turnover and export sales (where applicable)
• The proposed expenditure
• Your business bank details
• The rateable value of your premises – this can be found on www.saa.gov.uk
• A copy of your lease if you are paying non-domestic rates for the premise
• Your latest set of accounts and management accounts, as well as a business plan (or mini business plan)
• Two quotes for each item being purchased
• A calculation of your baseline carbon footprint
• The projected emissions reduction from this investment

Glasgow

Green Business Grant

The Glasgow City Council Green Business Grant will help businesses in Glasgow address both the cost of living and climate crises through measures such as energy efficiency, renewables, active travel and waste management.

The Green Business Grant is worth up to £10,000, which will cover up to 50 per cent of the total cost of a project. Projects can include anything that helps businesses reduce their energy bills and make progress towards achieving net zero carbon emissions.

To be eligible for the grant, your business must:

• Be a small or medium-sized enterprise (as defined in the Companies Act 2006)
• Have been trading for at least six months
• Own its own premises in Glasgow or have written permission from your landlord to make changes to the premises and seek planning permissions from Glasgow City Council Planning Division to implement the works detailed in your application
• Have a Glasgow postcode and pay non-domestic rates in Glasgow
• Be headquartered in Glasgow

Premises of an organisation based outside Glasgow will not be considered. Businesses whose main base is within the city boundary cannot use the grant to improve premises or create jobs outside Glasgow.

Businesses that are owned by another business with more than a 25 per cent stake are not eligible.

The grant will close to new applications on 20 December 2024 or when the budget is fully allocated, whichever is earlier.

West Lothian

Low Carbon Energy Efficiency Grant

The Low Carbon/Energy Efficiency Grant is worth up to £10,000 for West Lothian businesses that are looking to:

• Overcome barriers to reducing their carbon emissions
• Implement new business processes that will help reduce carbon emissions
• Implement strategic changes identified through consultancy support
• Promote their green credentials
• Enter a new market in the net zero landscape

Your business must also:

• Have at least five employees
• Have been trading for at least one year
• Have growth potential over the next three years

Perth & Kinross

Green Recovery Capital Development Grant

Through the Green Recovery Capital Development Grant, Perth and Kinross Council has made funding of up to £25,000 available for businesses that were financially affected by Covid-19, with preference given to projects which involve green initiatives to reduced your business’s carbon footprint.

• Replacement windows
• Solar panels
• Vehicle charging points

This fund offers grants of up to £25,000 to cover up to 50 per cent of eligible costs. Projects must involve a minimum spend of £10,000, which means that businesses must match the funding with at least £5,000.

The grant will not be awarded upfront immediately after approval – instead, you will receive payment after you make your purchases and submit receipts or invoices. This means that initially you must be able to afford the project’s full cost until you are refunded.

Priority will be given to projects that reduce the carbon footprint of your business. Applications must be submitted before 28 February, 2024.

East Renfrewshire

SBA Get to Zero Grant

The SBA Get to Zero Grant provides funding for businesses to improve energy efficiencies or purchase more efficient equipment.

Grant applications under £10,000 will receive up to £5,000 funding. Grant applications over £10,000 will receive a maximum 50 per cent funding up to a maximum grant total of £10,000.

Measures could include:

• Low energy heating and lighting systems
• Improved insulation for roof and building
• Solar, ground or air source heat or solar thermal technology
• Waste management or recycling
• Equipment that demonstrates a significant energy saving through its installation

Wales

Cadwyn Clwyd

Community Innovation Denbighshire

Led by Cadwyn Clwyd and Denbighshire Voluntary Services Council (DVSC), the £600,000 Community Innovation Denbighshire project will focus on encouraging micro firms and others to deliver environmental benefits.

Supported by Denbighshire County Council and part-funded by the Government through the £220m UK Community Renewal Fund, support is available for 25 organisations or individuals who can apply for a £5,000 grant they will match-fund to trial new products, systems and services.

Business Wales will also be on hand with guidance and advice throughout the process.

For more information, email admin@cadwynclwyd.co.uk or call 01490 340500.

Carmarthenshire

Business Renewable Energy Fund

Business Renewable Energy Fund offers grants of between £1,000 and £25,000 towards the cost of buying a renewable energy system. Each grant will be based on no more than 50 per cent of eligible costs.

Eligible businesses include:

• Advanced Materials and Manufacturing
• Construction
• Creative Industries
• Energy and Environment
• Finance and Professional Services
• Information Technology and Telecoms
• Life Sciences
• Food & Drink
• Tourism
• Retail
• Care

The grant can be used for:

Power Systems

• Small scale, single wind turbine
• Solar photovoltaic panels (roof mounted/ ground mounted)
• Solar photovoltaic battery
• Grid linked battery storage system (where the tariff is with a renewable energy supplier)
• Hydro-electric

Heating Systems

• Air Source Heat Pump (Air to water and air to air)
• Ground Source Heat Pump (vertical, horizontal, diagonal & radial)
• Solar thermal panels (roof mounted/ ground mounted)

More on small business energy grants

150 UK small business grants to apply for right now – UPDATED – In need of some funding for your small business? These grants should give you a boost, wherever you’re based in the UK.

The post Small business energy grants – what’s available appeared first on Small Business UK.

A look at the key options available when it comes to funding your business. What do they involve, and which is the best fit for various types of businesses?

Businesses today face numerous economic challenges, including the cost-of-living crisis, record-breaking inflation levels, skills shortages and increased pressure to maintain a healthy profit. Some of these challenges are already placing a squeeze on firms’ cash flow but now with interest rates also on the rise, the cost of borrowing – for consumers and companies alike – has increased.

>See also: Raising start-up capital – who to turn to?

The good news is that if your business wants to strengthen its financial position or capitalise on changing market conditions to accelerate growth, you do still have plenty of funding options available.

You can jump straight to a particular funding type or read on to find more info on the 6 best funding options for growth.

1. Debt funding
2. Venture debt
3. Equity funding
4. Invoice finance and discounting
5. Growth loans
6. Working capital

Small Business Pro will help with the heavy lifting of managing customers, taking payments, insurance, finance and HR, plus you’ll get a host of personal wellbeing benefits.

You can find out more about Small Business Pro here.

#1 – Debt funding

Debt funding is when a business raises capital via a loan, usually from a bank or another lender. Over the term of the loan, the borrower is expected to pay back the full amount, as well as any interest that is accrued – much like a personal loan.

Usually, raising capital in this way does not affect the overall ownership of a business, meaning the lender would have no influence in how your business is run day-to-day, which is the key distinction between this type of funding and equity finance.

Raising capital via debt is therefore a good option for business leaders that do not wish to dilute equity – or for businesses that have already raised equity capital and need to raise more cash, but do not want to dilute equity any further.

It is also a good option if your business is fast-growing or has recurring revenue. Fast growth firms often have high upfront costs, such as employee overheads and product development and need additional working capital to take their business to the next level. Debt funding will give you access to the capital you need to accelerate this growth and you can then repay the loan, plus the interest, as your revenue grows.

Likewise, the nature of businesses with strong recurring revenue makes them a good match for debt lenders, as there is clear visibility on the serviceability of the loan.

#2 – Venture debt

Venture debt is a specific type of debt funding aimed at earlier-stage businesses – this is often a good match for firms that are pre-profitability but can demonstrate a clear plan as to how they will get there.

Often these businesses do not meet the eligibility criteria for traditional loans, so the cost of venture debt is usually higher to encompass the increased risk to the lender, but by working with a specialist venture debt provider, you are more likely to find a tailored solution that fits your particular growth needs.

#3 – Equity funding

Equity funding can be provided through a variety of mechanisms, including private equity, venture capital and angel investors. The fundamental difference between debt and equity funding is that the latter involves divesting equity; in exchange for an agreed sum, the investor will take a percentage ownership of your business.

The benefit of equity funding is that because the investor receives upside in the form of equity, your business does not need to make regular repayments, or pay interest, which makes it a great way of raising capital with minimal impact on cash flow.

Equally, for less mature or less established businesses, you get the benefit of the investor’s experience, which, depending on the investor you choose to partner with, could be incredibly valuable in developing your business strategy.

Crowdfunding

Crowdfunding can also be a form of equity finance – you just sell a percentage stake in your business to multiple people, rather than to a single investor or institution.

For businesses that are just beginning their growth journey, equity crowdfunding can be a lower-risk way of raising capital, but this all depends on how comfortable you are selling a stake in your company. If equity dilution is not for you, there are many other funding options that will be more suitable.

>See also: Crowdfunding UK small business: everything you need to know

#4 – Invoice finance & discounting

If your business relies on invoice payments as its main source of income, it may be among the 36 per cent of UK SMEs which wait between 30 and 90 days to get paid. These long payment terms can play havoc with cash flow and leave very little left over to reinvest in growth or business expansion.

Invoice finance

Invoice finance solves this problem, enabling businesses to secure an advance on unpaid invoices – usually between 80-90 per cent of the invoice value. This puts the outstanding capital back in your hands so that you can spend it however you see fit.

Most lenders will offer a range of invoice facilities. Selective invoice finance, for example, enables businesses to secure funding on an invoice-by-invoice basis, meaning you can pick and choose the invoices you advance and essentially pay as you go with the associated fees.

Invoice discounting

Invoice discounting on the other hand, enables a business to leverage a larger amount of cash by advancing funding on a pool of invoices or debtors. This type of invoice finance is more useful for organisations that have specific uses for the capital in mind, because it usually raises a larger total sum. This sum can then be used for a variety of things – whether that is building a working capital buffer to strengthen cash flow in challenging market conditions, or something more growth-orientated, such as merger and acquisition activity, hiring more staff, or investing in product development.

Some specialist lenders will also offer specific multi-currency invoice finance facilities. These facilities are perfect for businesses that operate internationally, such as exporters and manufacturers, as it enables you to secure funding in the currency your invoices are raised in, rather than face hefty conversion charges.

#5 – Growth loans

Technically, all of the above can be considered growth loans, as the primary characteristic of a growth loan is that the capital raised is used to help a business grow.

The concept of a growth loan usually fits more with businesses that have a specific use for the funding in mind, particularly where that use is growth orientated. This could be for a number of reasons, including to execute mergers and acquisitions, to invest in research and development, or to expand into new premises, or hire more employees.

For this reason, term loans, venture debt, equity funding and invoice discounting fit more easily under the banner of “growth loans”, because they are more often used to fund specific strategies that accelerate a business’ growth.

#6 – Working capital

Working capital is similar – many different products, including invoice finance and term loans, can provide a business with working capital. The distinction between this and a growth loan, is that working capital is more often used to cover cash for day-to-day operations, rather than specific growth strategies.

However, for some businesses, increasing their available working capital means that they have more money to spend on things such a sales and marketing activity, which ultimately should contribute towards the growth of their business, so there is some crossover between the two definitions.

The importance of research

Financing a business can be an intimidating process, especially given the pressures of the current economic climate. Conducting some research on the above – and any other financial products that you think might be a good fit – is a good start. if you are still struggling, working with a finance advisor can be a great way of improving your knowledge of what is available. They will understand the nuances of each particular lender, as well as their lending criteria, risk appetite and associated fees and can usually offer an introduction once you have narrowed down your business funding options. Of course, there will be fees involved when you go down this route (usually made up of a fixed fee and then a percentage-based ‘success fee’) but like any consultant, if you take time to find a good one the benefits can be significant.

Online search is your friend too – most lenders have online calculators and application forms, so if you want to find out more, start reaching out. The ultimate takeaway is that the earlier you start looking in the fundraising process, the more business funding options you will have and therefore a better chance of finding something that is the right fit.

Vicki Taylor is principal at Growth Lending

Next steps

SmallBusiness.co.uk is working in partnership with trusted lenders to help you find the best finance deals.

If you’re looking for fast funding for your business, complete this quick application to access our panel of business lenders.

More on business funding options

Finance and support for your business – The Department for Business and Trade provides this useful list of finance schemes on offer from various UK local and regional government bodies.

Alternative business funding for small businesses – A comprehensive review of the sources of finance available outside of the ‘normal’ channels.

Small business startup funding – A guide to funding options available to get you through those early days.

Build Back Better #1 – equity vs debt, which is better? – Which is better when you want to grow your business, equity or debt? Ian Dawson examines the case for either.

A complete guide to business finance – Exploring the top ten options for SME finance and advice on where to find providers.

The post 6 business funding options for growth appeared first on Small Business UK.

It feels like the hospitality sector has been in crisis for a while. And it’s not all down to the pandemic either: along with rising energy prices and the cost of living, hospitality businesses have rail strikes, cyber security risks and a Brexit-induced labour shortage to contend with.

But even during the hard times, plenty of bars, hotels and restaurants manage to thrive. Whether you’re starting a hospitality business, in a position to expand or are looking for some extra financial support during a difficult period, here’s a list of the main funding options right now, so you can figure out what works best for your business.

Help with energy bills

Like a lot of British households, a large number of businesses need help with their energy bills right now, and that includes firms in the hospitality sector. That’s why the government created the Energy Bill Relief Scheme (EBRS), which was rolled out in October 2022 to help businesses deal with rising energy costs, by offering a cost cap on gas and electricity unit rates. If you haven’t already taken advantage of the scheme, you can read all the details here.

The government has been keen to stress that EBRS was put in place as a temporary measure, designed to be replaced by something else further down the line. In January 2023 the Treasury did just that, announcing the Energy Bills Discount Scheme (EBDS), which involves a discount on energy prices rather than a cost cap. So support is being scaled back to some extent, but the government says the change is partly because wholesale gas prices have fallen since the first scheme was announced.

As with EBRS, energy suppliers will automatically apply reductions to the bills of all eligible organisations as part of the new scheme, so you don’t need to apply to get your discount. Depending on when you’re reading this, it’s also worth noting that EBRS runs to the end of March 2023, with EBDS starting on 1 April 2023 and expected to last for a whole year.

Grants, charities and local funding

Many operators made use of hospitality business grants, the furlough scheme and business rates relief during the height of coronavirus restrictions, but all of these schemes have since been withdrawn. For those seeking out business grants for hospitality today, your best bet is probably a charity or your local council.

If your business is already working to be sustainable, or you’re ready to make your business more green, you might be eligible for an environmental grant. Glasgow City Council is currently offering Green Business Grants, where you can get up to £10,000 to finance projects designed to manage waste, reduce emissions and be more energy-efficient. The West of England Combined Authority has offered a similar scheme too, so it’s worth finding your local council’s website and seeing what’s out there, as new programmes are constantly emerging.

Local foundations are also teaming up with brands to provide grants. Take Foundation for Future London and its Westfield East Bank Creative Futures Fund, a five-year scheme investing £10 million into a number of east London boroughs. The programme has already awarded millions of pounds to a wide range of businesses, including caterers and cookery schools. You can sign up here to find out when year 4 of the scheme is set to open.

Organisations like Hospitality Action, the trade charity for the hospitality industry, offers grants too. But unlike council funding, Hospitality Action is more about supporting individuals who work or have worked in hospitality, whether they’re struggling due to illness, addiction, family problems, mental health issues, financial difficulty, or something else.

Business loans and other lending products

There’s also the option of borrowing money from a bank or lender and paying it back over time. Hospitality business loans are generally for companies that are in a position to grow, but it all depends on your financial history and what you’re looking to achieve. Fortunately, these days there’s a wider variety of providers to choose from, including both high street banks and newer, alternative lenders like Kriya, Fleximize, Close Brothers and more, some of which may be able to provide funding more quickly than high street banks.

There’s lots of reasons why a hospitality business owner might take out a loan, from keg and cask rentals to spreading the cost of a big stock purchase. If you’re looking to invest in a new piece of kitchen equipment, for example, you might consider asset finance, where you can get something big without spending a lot of money up-front, through hiring it or paying the purchase off over time.

As a hospitality business owner, there’s a high chance you’ll turn to a lender when it comes to property too, whether it’s buying somewhere, refurbishing an old space or expanding your existing premises. Maybe you’ve come across the perfect location, but the property needs a lot of work until it’s fit for purpose; perhaps you’re just looking to expand. Either way, there are plenty of specialist lenders out there, who could help you open your next pub, convert an office into a hotel or turn a dilapidated building into a neighbourhood restaurant, as long as you’re creditworthy enough.

Ultimately, there’s far less government support than there used to be, even though times are still tough for many hospitality firms. But there are still places where you can seek out external funding, from local councils to charities to traditional business loan providers.

Next steps

SmallBusiness.co.uk is working in partnership with Finpoint to help you find the best finance deals.

If you’re looking to make sense of your hospitality funding options, complete this quick application to access the UK’s largest panel of business lenders.

Read more

Merlin Griffiths: ‘We are creative, resilient, adaptable – this is hospitality!’

The post What are the funding options for hospitality businesses? appeared first on Small Business UK.

After years of explosive growth, things have changed for the UK tech sector. UK technology investment dropped by more than 20% in 2022, with nearly 80% of all founders saying it’s now harder to raise funds, according to Atomico’s State of European Tech report.

But it’s not all doom and gloom. And there’s still plenty of ways you can get tech company funding, whether you’re just starting up, have been trading for years or need something short-term to deal with a cash flow gap. As always, your options hinge on two key choices: give up a stake in your business or borrow something that you’ll have to pay back.

Small Business Pro will help with the heavy lifting of managing customers, taking payments, insurance, finance and HR, plus you’ll get a host of personal wellbeing benefits.

You can find out more about Small Business Pro here.

1. Friends and family funding

Many businesses get started by cobbling together cash any way they can, from life savings to remortgaging a home. Sometimes entrepreneurs get money from people they know, like friends, relatives and others they’ve met along the way. Tech companies are no different: Jeff Bezos convinced his parents to become early investors in Amazon, while Steve Jobs sold his Volkswagen to raise the money for the first Apple computer.

When you’re getting funding to start your tech business, one reason you might turn to friends and family is that banks may be more hesitant to lend to you, especially if you have no financial track-record. With people you know, things are more informal and they may be willing to back something others deem too risky.

How does it work?

It all depends on who you know. Maybe you have an uncle trusting enough to lend to you on an interest-free basis, with relaxed repayment terms. Perhaps you have a wealthy school friend willing to make you a generous one-time gift. Maybe you know someone else up for lending you money, as long as it’s over a specific time period or in exchange for equity.

Either way, friends and family funding isn’t risk-free. Things get complicated if people are expecting a return you can’t deliver, particularly if they aren’t able to cope with that level of financial loss. So make sure you only accept money from people who can afford it, or those you’re willing to give away control to.

2. Government-backed funding

If you’re a tech company seeking funding, it’s worth considering the government’s Start Up Loans scheme. The programme has provided more than £800 million worth of loans for over 90,000 business ideas, covering a range of sectors.

Unlike business loans, the scheme offers unsecured personal loans from £500 to £25,000, with a fixed rate of 6% interest. What’s more, you can repay the loan over a period of up to five years and there’s no application fee or early repayment fee. There’s also scope to apply for a second loan.

How does it work?

First, check if you’re eligible by filling out some key details. After that you’ll need to complete an application form, which focuses on your financial situation and what you’d use the money for. If you pass a credit check, you’ll be asked for a business plan, cash flow forecast and personal survival budget.

After that, a dedicated business adviser will review your documents and help you get ready for assessment, the last stage of the process. If you’re successful, you can get a year of free post-loan mentoring and support too.

3. Equity funding

Equity funding is all about selling shares in exchange for investment in your business. It’s a common approach for entrepreneurs getting funding to start their tech business, who often turn to venture capital firms or angel investors.

If you aren’t familiar with venture capital (VC) firms, they tend to focus on early-stage businesses. VC firms sometimes inject millions of pounds as part of series A funding into the tech companies they have interests in, as well as multiple rounds of funding after that. They often take a minority stake, either 50% ownership or less, which means you’ll potentially give away a lot of control.

Angels do something similar, but usually invest less. They’ll offer advice and input too, but in a more hands-on way. After all, they’re investing their own money and have probably been successful entrepreneurs themselves.

How does it work?

First off, you’ll need to be sure you’re even relevant, so get to grips with your financials, how much you’re after and whether your business is at a stage VCs or angels will even consider. That means early stage, pre-revenue or pre-profit.

You can find angels through directories like the UK Angel Investment Network and the UK Business Angels Association (UKBAA), but it’s worth doing lots of research. With VCs, it’s a similar game: loads of research, including attending events and examining the portfolio companies of the VCs that pique your interest. Most of all, you’ll need a stellar pitch.

4. Invoice finance

Cash flow problems are one of the biggest issues tech companies face. Depending on how you make money, your income can be lumpy, as sales fluctuate and clients take time to pay. Meanwhile your outgoings stay the same, whether it’s rent, payroll or the money you need to pay suppliers.

When it comes to overdue invoices, chasing helps – and you can always call in the debt collectors, if it gets to that. But however you deal with late payments, things tend to drag on, sometimes taking months. With invoice finance, you can unlock up to 95% of the money you’re owed, sometimes within 48 hours.

How does it work?

Let’s say you run an online wholesale business and it’s coming up to Christmas, when you’re expecting lots of big orders. You’ll need to pay for extra stock and maybe even hire more staff, to ensure you can meet demand.

The problem is you’re owed £7,000. If you agree to an invoice finance deal which gets you 90% of that invoice up-front, with total fees and charges at 3%, you could get an advance of £6300. When your customer pays, you’ll get the remaining value of the invoice (£700) minus fees (£210), so you receive £490.

5. Working capital loans

You might take out a working capital loan for similar reasons to invoice finance, in that it can help you fund day-to-day operations. When it comes to tech company funding, working capital finance is particularly suited to seasonal businesses.

With a working capital loan, you could plug a gap and ensure your bills and other expenses still get paid. This type of funding is for the short-term and you’d pay it back within a year, so you wouldn’t use it to invest in equipment or property.

How does it work?

Let’s say you sell software to accountants, who are traditionally extremely busy during self-assessment tax return season. When they’re unreachable, your prospects are far less likely to buy. But you still need money coming in for your other commitments.

With a working capital loan, you could tide your business through that cash flow gap. As with most funding, the amount you can borrow depends on your credit score, how much you’re turning over and how long you’ve been in business, along with your industry and whether you have assets to secure the loan against.

6. Traditional business loans

The term “business loan” is a broad one and it includes some of the options we’ve listed above. Here we’re talking about loans that aren’t tied to your invoices or for working capital, which you might use to expand, by upgrading your offices, buying property or launching a new service line.

You could finance these activities with an unsecured business loan, which can be more straightforward. There’s also secured loans, where you might put down property or equipment as security. With secured finance, you can take advantage of fixed interest rates and early repayment; lenders might look more kindly on your credit score too.

How does it work?

Like other funding, lenders want evidence that you can pay them back, which they can get by reviewing your accounts, for instance. The other classic stuff applies too: some lenders will only consider your business if you’ve been trading for a specific number of years, or if you’re in a creditworthy sector.

Next steps

While the money out there for UK tech companies has been squeezed lately, that doesn’t mean there aren’t good options. A lot of it comes down to your goals and proving that you’ll achieve them. With VCs and angels tightening their belts, debt finance has become increasingly attractive for tech companies seeking funding, but it can be a tricky space to navigate.

SmallBusiness.co.uk is working in partnership with Finpoint to help you find the best finance deals.

If you’re looking for fast funding for your business, complete this quick application to access the UK’s largest panel of business lenders.

Read more

How to choose the right finance option for your SME

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Following winning The Start-Up Series competition, Ed Bird from Bird Eyewear discusses how the business has shifted since winning the competition, the biggest growth challenges the business experienced, how to focus on the next funding round and provides his advice for entrepreneurs on the beginning of the start-up funding journeys.

Can you remind us what your company does and how the business has shifted since you won the Start-Up Series and first received investment?

We make beautiful sustainable eyewear – creating exceptional designs and focusing obsessively on quality. For us it’s about reframing what really matters; people and planet. Firstly, seeking out the best sustainable materials for our frames, including certified woods, bio-based acetate, renewable cork and recycled aluminium.

We also ensure that every pair of Birds gives back through our Share Your Sun partnership with SolarAid. Helping to distribute solar light to families in Zambia and Malawi, replacing the use of fossil fuel burning lamps.

Since winning the Start-Up Series we’ve developed and improved almost every part of the brand, from changing our domain name and social media handles, to changing web-platform, product iterations, brand styling and more. Some of these shifts have been larger than others, but each one has had a positive impact. It’s all added up to give us a really strong 2021 year with thousands of happy customers.

What has been your biggest challenge during the early stages of your venture and how has the support from Worth Capital helped the business grow?

Team capacity has been a big challenge, along with some product supply shortages (although linked to strong sales, so we’ll take the good with the bad!).

We also had some online challenges in the early days, and with more consumers turning to online shopping, we’ve focused on this and implemented our virtual try-on and home try-on services which have been a great success.

As an early stage team we’re often sharing a lot of the day-to-day work so when things got busy it could be overwhelming knowing what to prioritise. Thankfully, we’ve had some great support from Worth Capital and guidance which came at the right time to

boost our strategy. We’ve now tripled our team size and have a really solid foundation for growth.

You’re now in a position where your business requires more funding. Tell us about how you’ve prepared for this funding round and how you are going to approach it.

Yes, we’ve built a lot from a little and are now looking to build on our early success. The eyewear market is changing along with consumer buying habits and what people expect from brands. These days it’s as much about the company and brand story as it is about the products.

We’ve positioned ourselves at the forefront of this change, both as a company and the products we make. For example, in 2020, we became the first B Corp certified eyewear brand in the UK. This means we’ve been verified to meet the highest standards of social and environmental impact; something that resonates with consumers.

We’ve built this sustainability model into everything that we do. Thanks to our recent work on our supply chain and our carbon reduction through SolarAid, we are now a carbon negative company with fully mapped and detailed carbon emissions. For us, this is just the start of an on-going drive to improve our products and create better eyewear for a better world.

We’ve done a lot of market testing, and have a solid playbook to move forward with, which includes profitable economics and building on and leveraging technology for an ever-better consumer experience, plus plenty more innovative products in the pipeline.

We’re speaking with investors already and have our investor deck and financials ready to view. Our goal is to raise circa £300K to propel us into an even stronger market position and a category defining brand.

What have you learned since your first funding round and what advice would you give to other founders embarking on their start-up funding journeys?

We’ve come a long way since our first funding round, our business has changed in lots of ways, but always for the better thanks to the support we’ve had.

Advice and guidance is crucial, and we’d definitely recommend surrounding yourself with a strong advisory team. Develop a thoughtful strategy which you can grow into (or outgrow if needed). You need to be flexible as you grow so being open to new ideas and innovative changes will always aid your progress.

The post Former Start-Up Series winner discusses his next funding round – Ed Bird, Bird Eyewear appeared first on Small Business UK.

Checking the track records of a Seed EIS investment manager for professional advisers, investors or companies looking for funding can be very difficult because of the lack of independent data.

Although there are a number of research groups analysing the managers, they all tend to look at different elements of the groups and no-one tracks the actual investment returns.

So if a professional adviser or investor are doing their own research what should they be looking for?

Matthew Cushen, one of the founders of Worth Capital, acknowledges the challenge, particularly if the adviser is just looking for the number of companies the investment manager has successfully exited.

He says: “SEIS is much younger than EIS, which has been around for over 25 years and a number of groups can point to realised returns from exit, either with or without including tax breaks. Seed EIS is less than decade old, and by their nature many of the businesses we invest in are younger and are sometimes pre-revenue.

“At Worth we source investee companies through our Start-up Series where we offer successful companies up to £250,000 in the form of an equity injection, and these companies are at all stages in their early life cycle. We tell investors in a portfolio of ten investee companies it’s likely that one or two won’t make it. But it would be wrong to judge us by the failures. I think we should be judged on how we work with those companies that make it, and in that cohort we expect one or two will make it quite big for investors.

“If you’re a company looking for Seed EIS investment then you should look at what we can offer other than capital. In our case, myself and my business partner have long experiences in helping companies build their brands and market propositions. This is important because we meet a lot of companies with good ideas, who are generating revenue and may even be profitable, but this not necessarily the same as a business which can grow significantly, making it appealing to another company or larger VC investor to invest in.”

One of the partners of Nova, based in Liverpool, Andy Davidson, is in agreement with Mr Cushen. His firm specialises in technology-driven businesses and his firm operates an active mentoring programme which helps companies build its structure from the bottom-up, depending on where they identify areas which need support.

He says: “Many of us at Nova come from a software or technology background and we have built and sold businesses in the sector so we understand first hand the challenges. Often we come across businesses which are not a lot more than an idea — we have one currently in the health sector related to cleanliness — but we can help develop and scope out that idea so it becomes a real business.”

They are both in agreement that advisers, investors and company founders should all do as much due diligence on the Seed EIS investment manager as the managers do on the investee companies. They discuss the issues on this short video:

“For an advisor who is looking to select an #SEIS investment manager for his/her own or client’s assets, what should they be looking for with those managers?” Hear answers from Matthew Cushen, @WorthCapital & Andy Davidson, @WeAreNovaUK https://t.co/BhHUZVEQaM

— Small Business (@smallbusinessuk) January 14, 2021

The post How can you assess a Seed EIS investment manager? appeared first on Small Business UK.

Many investors and professional advisers are tempted to put all their Seed EIS investments with a single investment manager who they believe has a good track record, but by doing so they are potentially increasing their risk – it’s important to have a diversified portfolio when seed investing.

Many investment managers are investing at Seed EIS and with the follow-on EIS investments in the broad technology sector, partly because technology is a large sector which has accelerated in popularity since on the onset of the pandemic.

Two Seed EIS investment managers, Nova and Worth Capital, argue that diversification is essential because just as investor would not put all of their investments into a single company listed on the public markets or a single main stream investment fund, so putting it with a single SEIS manager is not advisable.

Andy Davidson, one of the partners at Nova based in Liverpool, says academic research consistently shows diversification is achieved with a portfolio of around 30 companies, whereas most Seed EIS funds have between 5 and 10 portfolio investments. Simple maths suggests an investor should spread their Seed EIS investments between three to five fund managers.

Matthew Cushen, one of the founders of Worth Capital says’ As well as the number of underlying companies it is important to get a spread across business sectors and investment managers with different expertise. We think our branding and marketing expertise is perfect for the companies we invest in, but that can be quite different from the needs of the technology businesses which Nova invests in.’

Mr Davidson believes investors and their advisers should look at both Worth and Nova, as well as other experience investment managers such as Deepbridge or Jensen, because all four groups invest in different areas, and he discusses these issues with Mr Cushen in a short video.

In our second part of our #SEIS series, we asked, why is #diversification essential at this part of the market? #seedfunding #seis #eis #entrepreneurs #startups #startup #startupgrowth #startupfunding #equityfunding #investment https://t.co/rjcTayt8ec

— Small Business (@smallbusinessuk) January 13, 2021

The post Why is a diversified portfolio essential when seed investing? appeared first on Small Business UK.

The Start-Up Series competition is back for February! Win hands-on help and up to £250,000 in equity funding for your business (subject to due diligence, terms & conditions) – apply before February 14.

Continuing our usual monthly cycle, the competition is open for entries from 1st to 14th of each month, where we’ll be hunting for ambitious start-ups with the potential to become much loved brands. Regardless of sector or whether you’re a B2B or B2C business, as long as your start-up is eligible for SEIS or EIS HMRC advance assurance, then we’ll consider your application.

Winners will receive up to £250,000 of equity funding, a minimum of two-years expert support from Worth Capital and media coverage on smallbusiness.co.uk and other channels to promote your business and follow your journey.

See how to enter here. Please note, your start-up will need to be eligible for SEIS or EIS HMRC advance assurance.

Hayley Etherington, business operations director of Worth Capital, said: “The Start-Up Series has already invested over £4.2M into some of the UK’s most promising start-ups – which makes us the largest seed funding competition in the UK”.

“We’re hoping and expecting that the Start-Up Series, continues to attract the very best UK entrepreneurial talent for our investors to back. Along with the other judges, I’m on the edge of my seat waiting for the next applications to roll in.”

Previous winners include entrepreneurs from all walks of life and throughout the UK. Cheltenham-based Jo & Nick James, founders of Bedfolk have gone on to achieve exceptional growth with their homewares ecommerce brand since winning the Start-Up Series and receiving their first investment in April 2019. Read more about their story here.

Andy Roberts from Wrexham has a software-as-a-subscription proposition, Weekly10, helping organisations to track and improve sentiment and engagement amongst employees. Having received several investments during 2019 and early 2020, the business was well positioned to take advantage of the increase in remote working over the last 6 months.

Read more here.

The Start-Up Series has an impressive record of funding diversely. Whilst typically only 9 per cent of early stage funding goes to businesses with a female founder, the Start-Up Series has seen 40 per cent of its funding reach businesses with a female founder.

The Start-Up Series also bucks the trends on geography. Generally, only 35 per cent of seed funding heads to businesses outside of the London & South East ‘bubble’, with the Start-Up Series it is 60 per cent of the funding heading outside London. There are no benchmarks published on how much of the UK’s early stage funding goes to businesses with a BAME founder, but we suspect that the Start-Up Series, at 19 per cent, is more inclusive than most (but still with a way to go to be truly representative).

Ms Etherington continued: “We’re looking across the length and breadth of the country for ambitious start-ups with an innovative proposition in high-growth markets, and with smart and tenacious teams that can grow a business fast”.

The post Secure funding and expert mentoring for your start-up appeared first on Small Business UK.

There are many different ways for a business to raise money. Unfortunately, seldom are any of them easy and it can be frustrating and disheartening. Understanding the broad rationale for different types of investors might save some of that effort and frustration.

Lenders are fixated on the probability that a loan will be paid back. This generally means seeing regular revenue, sufficient to cover principal and interest payments. They also seek security over some assets – either the business’s or, if they are not sufficient, through a personal guarantee from the founders. Their confidence in available revenue and the value of assets increases if there is a relationship that has bred some trust and where there is a credible financial history. Hence debt is only rarely an option for the newest businesses.

For equity investment there are very different aims and criteria. You may have family and friends, for whom the relationship will be as important as the returns and they might only have one venture investment. But for experienced angels, professional investors and venture capital firms that are investing other people’s money, the investment is likely one of many in a portfolio.

When considering a portfolio of early-stage businesses an investor will expect some of them to die. But the health of the portfolio is driven by outsized returns from a small number of investments. In very early-stage businesses, a venture capital investor may expect to lose their money 7 or 8 times out of 10. But they expect those that do well to return at least 10 times their cash, and hopefully 30 or 50 times their original investment. A venture capital investor in businesses that are still high growth but 2 or 3 years old may expect the worst of the mortality rate to be over and more like 2 or 3 in 10 businesses to fold. If they can achieve 3 to 5 times returns on the ones that make it, then the portfolio works out very well.

Directly from this maths flows the criteria for which an investor will consider a business. I deliberately write ‘consider’ as it’s not the criteria for whether they will invest or not. That will get much more rigorous – about the team, the market, the idea and the commercial model. But just to get into a conversation, there are a few basics that put a business within or out of scope.

See also: To VC or not to VC – that is the question

Tips for attracting VC investment

Growth: the business proposition must be one that has potential to grow very fast. If a business is going to grow its value by five to 50 times, the proposition needs to be innovative and in a large and fragmented market, growing fast enough to allow that innovation enough space to grow. For example, a chain of barber shops is unlikely to have true innovation and certainly won’t be in a high-growth market.

Scale: supersized returns come from top-line growth but also a healthy margin, where the returns increase exponentially with scale. The VC market’s fixation on technology is driven in part by the expectation that a market is unbounded by geography and a solution can expand transcend borders, whether county, country or continent. And is able to do this with relatively little additional investment for each new territory, therefore creating economies of scale. Compare this to a sector like restaurants, for which investment in premises, decor and the right location are a big part of the formula of success and so each new location feels much like a whole new business.

Return on capital: returns are a factor of how much you get out versus how much you put in. So take two businesses with the same growth potential. Say a manufacturing company, which needs a large amount of cash to get going and another, say a direct-to-consumer eCommerce company that is building a strong brand but is not owning its own assets and therefore needs less upfront cash. The second is a more attractive investment. That is not saying that asset heavy businesses never get equity finance, but it is certainly harder for them.

Exits: achieving a return on an equity investment relies on someone buying that equity at some point. So, an investment needs confidence at the start that the founder will be motivated to sell and, generally, that the business is able to be packaged up and sold onto a trade buyer or a private equity company. Whilst any business is initially highly dependent on its founders, a business model where that is always going to be the case, or where competitive advantage is driven through human capital, will be unattractive for venture investment. So professional services firms or creative agencies for example, find it difficult to find external backers.

Tax: often a venture capital firm will have a specific tax class that they promise their investors. In the UK the government supported tax schemes — the Seed Enterprise Investment Scheme (SEIS), the Enterprise Investment Scheme (EIS) and Venture Capital Trusts (VCTs) — are designed to help investors mitigate the risks of investing in earlier stage companies. But there are conditions attached and if the company does not fit HMRC’s criteria then the VC would not be able to find a place for them in their portfolio.

For example, to qualify for SEIS a business must be trading for less than 2 years. Both SEIS & EIS have restrictions on financial services business or ones where a large part of the value of the business is property related. A business that might end up paying good dividends in the future is not as attractive under SEIS or EIS as one that can create a large exit, as under that scheme dividends will be taxable for the investor, but one-off capital gains will not be.

Therefore, venture capital investors turn down many applications that have the ingredients of a great business, that could be very successful and throw off a great income for the founders. Simply because they lack the characteristics of an attractive equity investment to add to a high risk, high growth portfolio.

Whilst it is always disappointing and frustrating to hear that someone won’t back your business, it helps to divorce the judgement of the business versus the judgement of a venture capital decision.

See also: How do you know it’s time to raise venture capital?

The post Why won’t investors back your small business? appeared first on Small Business UK.

What did you have for breakfast this morning? A Pepsi AM? A Cosmo yoghurt? Or a glass of juice fresh from your Juicero?

No, you didn’t. You could have – briefly – in 1990, 1999 and 2017. All are spectacular, financially disastrous and reputationally costly product fails. And we’ve only reached breakfast time.

One of the most misleading clichés around is that ‘there is no such thing as a bad idea’. Complete nonsense and tweak anyone on the nose that says it before they do more damage. The world is littered with bad ideas

They come from the big corporate world as brand extensions within category – such as Pepsi introducing a pointless new variant for which the consumer had no need. Or as responses to an internally generated strategy that has forgotten to understand consumers – such as Cosmopolitan’s logical attempt to move into health & nutrition products but with a product for which their brand had no real relevance in a hugely congested category.

However, corporates rarely bet the farm on one product extension — start-ups do.

The Juicero was a $400 machine that squeezed Juicero packets of diced fruits and vegetables. Presumably, the investors that poured $120m into the business must have been fixated by the heady combination of hardware plus monthly subscriptions for the packets. The perfect commercial model. But consumers don’t buy a commercial model, they spend their cash on satisfying a need.

Juicero might have been able to satisfy a basic need for nutrition & taste, but a consumer is rarely one dimensional. In this case, they would have been weighing up convenience (fruit and veg are not difficult to source, so why is a subscription required?); speed (the machine was slower than squeezing by hand); cost ($400 plus subscription – really?) and environmental impact (pre-packed fruit and veg – really really?)

Poor ‘product market’ fit is the top reason that a start-up fails. There are many studies of this and an extensive one put this as the reason for 42% of start-up failures.

When we assess businesses for investment, we obsess about the market need and want to see entrepreneurs that share that obsession. If a start-up has unique insight that has uncovered a market need or has data that proves the demand for their product or service then we are all ears. But just an idea, with no consumer validation, is not going to make it far with us. It’s why we don’t respond well to ‘tech’ businesses.

Business that describe themselves by the tech they use (AI & blockchain being cliched examples), are falling into the trap of being product led not market led. We often look at a tech business and think ‘it’s a great solution desperately in search of a problem to solve’.

So what are the pre-requisites for giving yourself and potential investors confidence to bet on a product or service?

Market need

Get into your consumers’ or clients’ shoes. Think of all the reason they would purchase your product, then spend much more time thinking about all the reasons they wouldn’t. Think about where they would substitute spend to buy your offer. Stop only when you can answer the two critical questions:

• what need is my product or service satisfying?
• why is my solution better than those that exist already?

Don’t fall into the Juicero trap of thinking that there is no product that exists already in the ‘wifi enabled subscription juice’ category, when they should have been thinking about the need for ‘fresh juice’.

Consumer validation

Generally, this is proactive &/or reactive. Maybe a proposition is conceived from consumer insight that describes a gap in the market – ‘I wish there was a way of doing…’. DIY solutions or hacks can be a good sign of this.

Or you might follow the Steve Jobs philosophy that ‘Customers don’t know what they want until you show it to them’. That is fine so long as you do show consumers something and get their feedback. This doesn’t have to be a finished entity — it can be scamps on paper, a model, or a mocked-up website service with nothing behind it. With a price tag. Whatever it takes to get an approximation of the reaction and behaviours you’d get from consumers in the real world.

Market scale

To scale a business, you eventually need a large market with gaps where innovation can thrive – either because it is fragmented, poorly served or high growth. You might have nailed market need and got great consumer validation but only with a small market segment. A good start but you’ll need a plan to transcend the segment and move into the bulk of the market. So don’t just hang out with your ardent fans, understand the differences between the needs in the niche compared to the wider market.

Continuous iteration

The first three pre-requisites have all involved speaking to consumers, gaining quantitative or qualitative data and discerning insight. And the fourth is no different. It is more of the same as your product or service builds out. Constantly testing hypothesise and propositions and responding to feedback.

By the way — get these things right and not only will you and your investors have confidence in your product or service, but you will also have created the fuel for how you describe and communicate your proposition to the market in the language they will respond to. More about that another time.

PS: About that phrase ‘there is no such thing as a bad idea’. It is rubbish in a literal sense, the world is littered with bad ideas and broken dreams that should never have had effort or cash put into them. However, it is bordering on truth. Ideas are never worthless, and all ideas should be considered even if at first sight they seem bonkers. Within any idea lives some insight, some reason why someone thought it interesting and worth discussing. The trick is to retrieve the nuggets of value but then ditch a ‘bad’ idea before it does any damage.

Written by Matthew Cushen, co-founder at Worth Capital

Further reading

7 funding choices when it comes to financing your start-up

How start-ups can qualify and take advantage of EIS and SEIS 

3 ways start-ups can create irresistible investment proposals 

Start-up valuation – an investor guide to valuing a start-up

7 investor personas: how start-ups can understand their motivations 

The post Looking for investment? Start obsessing about market need appeared first on Small Business UK.

As a start-up or small business, what are you funding choices? And the consequences of those choices?

Can you afford the time that it could take to grow the business organically – limiting the upfront cash and reinvesting revenue? Or do you need to develop the product/service quickly, chuck cash at marketing, get the brand in front of people, grow quickly and grab market share before others?

Do you have some personal cash to keep you going or are you going to need to pay yourself a salary before the business is generating enough cash to cover it? Are you going to recruit and pay others? Probably the most stressful aspect of building a team is ensuring you can meet payroll each month.

‘If you aren’t a natural spreadsheet warrior then find someone who is that can help’

How to create a cash flow forecast

To answer these questions you need a cash flow forecast, and ideally some comparisons across some different scenarios.

The high investment/fast growth scenario, the slow burn scenario, the optimistic scenario and the worst-case scenario where you don’t manage to generate any of the expected revenue and cash is flowing one way. A cash flow needn’t be complicated, just adding up the revenue coming into a business each month and subtracting the cash flowing out of the business (salaries, rent, R&D, marketing etc.). But it should be comprehensive. And it’s called a cash flow for a reason. Forecast when payments are made, which can be vastly different to when a sale or contract is made, and VAT timings make a big difference to. If you aren’t a natural spreadsheet warrior then find someone who is that can help – to both think in that structured, comprehensive way and make sure the maths adds up.

From the cash flow (and adding a bit of contingency for unforeseen events), it will be clear how much investment you will need.

Bootstrapping your start-up

Maybe you can “bootstrap”. Cobbling together some personal cash to grow the business, either just sufficiently to get some confidence that the idea has legs, or possibly even to the point that the business is generating enough free cash to reinvest. My business partners funded their first business, in 1992, with a £2,000 loan from one of their mothers. She drove a hard deal. If she wasn’t paid back within six months she’d take 50 per cent of their business. It focused them both and after 182 days they paid the loan back, with interest.

But many of us haven’t got spare cash or family in a position to lend money. Or the business idea may be capital intensive – i.e. need lots of up-front investment (maybe in R&D, product development, manufacturing and/or marketing) before it generates revenue.

To fund a business there are broadly two options:

Debt

Taking on a loan. Sometimes available for businesses generating cash or buying assets that can be easily converted back to cash, such as commonly used equipment (like that used in a commercial kitchen) or stock, therefore providing some security to the lender

Equity

Selling a slice of the business. Useful for start-ups that need time to get to their first revenue, who are spending on intangibles like marketing or product development, or who are going to forgo early profits to grab market share fast.

Then there are various different sources:

#1 – ‘Family, friends & fools’

A traditional route for either a short-term loan or long-term equity. Often the easiest and quickest option but not open to many and can strain even the most unconditional love if the business runs into difficulty. Start-up loans: the government backed scheme that lends up to £25,000, at 6% interest with no arrangement fee. Critically there is no personal guarantee, so if the business cannot afford to pay back the loan, the scheme will not come after the founder’s personal assets.

#2 – Banks

A loan option for businesses generating cash. Banks are under a lot of pressure to demonstrate their support and funding for growth businesses. But they limit their risk, which generally means, at least in the first couple of years, business owners are likely to have to provide a personal guarantee. So, as they say, your home could be at risk if you don’t keep up repayments.

Related: How to win bank funding

#3 – Peer to peer marketplaces

Such as Funding Circle, which assess risk, liquidity and value of a businesses’ assets and facilitate private individuals lending cash, in return for higher interest than they could get from stashing their cash in a bank.

#4 – Founder’s cash

If you believe in your business, need to invest before building revenue, want to avoid giving away equity and have some savings, then you can avoid giving away equity at a low early valuation by using your own cash. Or by finding a business partner who’s able to put in some cash as well as expertise to become a co-founder. If the business subsequently raises equity funding, investors value the commitment and confidence founders show by risking their own cash.

#5 – Angel investors

Typically, angels invest in exchange for equity, but occasionally as a loan. Amounts are likely to be between £5,000 and £100,000. Often angels invest as a syndicate, where they may know each other or have come together specifically for one investment. Some may be ‘smart money’ – investors that have and are willing to share expertise and contacts within your sector.

Angels can be found independently, using LinkedIn for example, but this can take a lot of time & energy – diverted from operating the business. So, although networks charge 5 per cent to 8 per cent of the funds raised, it can make sense to use networks for making introductions. Regardless of how you find them, you’ll been to spend a lot of time meeting angels and pitching your story.

#6 – Equity crowdfunding

Over the last eight years, the likes of Seedrs and Crowdcube have become a useful source of start-up equity funding. Investors generally invest between £100 and £50,000 through crowdfunding (with a long tail at the bottom end and very few at the top). A business raising £100,000 could easily end up with hundreds of shareholders. Potentially useful advocates for a consumer business. But many small shareholders can be a burden later down the line and there is a significant up-front time investment required to create a compelling campaign. Crowdfunding is not as democratic as we’d like to believe. For a campaign to be successful, 30 per cent to 40 per cent of the funding needs to be committed before kick-off (the crowd follows the crowd), so it doesn’t remove the burden of having to land some other investors up front.

#7 – Investment funds

The government offers generous tax reliefs for investing in start-ups, but few investors have the time to consider their own deals or would back their own judgement in this specialised space. So there are funds that do the leg-work and give them a diversified portfolio of investments. If a start-up can attract investment from a fund, it’s a very efficient option. Fees are similar to those charged by angel networks or crowdfunding platforms, but for one conversation and one set of paperwork for the entire funding and subsequent shareholding. Generally the funds are backed by sophisticated investors and well placed to provide follow on funding as the business grows.

On this last one, I could be a little biased as my small venture capital business, Worth Capital, has a start-up investment fund. In exchange for equity we invest in the winners of the Start-Up Series — a competition that will reopen on smallbusines.co.uk from September 1st 2020.

There is one more option beyond debt & equity for businesses with an innovative and tangible product that can get shipped around the world. Product crowdfunding through sites such as Kickstarter or Indigogo helps you get your story straight, gather insight, build brand awareness and can finance initial manufacturing as customers pay up front. Production only starts if a minimum number of ‘backers’ is reached.

Plenty of options, from which to find the right funding route for your business and ambition. Good luck!

Written by Matthew Cushen, co-founder at Worth Capital

Further reading

Small business startup funding – a guide to the options available to get you through those early days

The post 7 funding choices when it comes to financing your start-up appeared first on Small Business UK.

As a new entrepreneur, drawing up a meticulous business plan is often just the beginning – it’s the investment that brings an idea to life. Achieving investment bridges the gap between having a great idea and building a successful business.

However, when your chance to secure that funding comes down to a short pitch effectively persuading a stranger to part with thousands of pounds (if not more), it’s no wonder that nerves can get the better of some people. It’s a pressure-filled moment, but with the right planning and preparation, there are ways to make pitching easier – for yourself and for your potential investor.

Make it personal

Sending a generic email blast to hundreds of investors will not work. It’s that simple. There’s plenty of competition between entrepreneurs and if you send out the same email over and over again, you’re hardly going to stand out from the crowd.

The best way to make contact with a potential investor is through their own network, such as a co-worker or a business owner who has already received investment from them, although not everyone will have these contacts.

The next best option is to make a personal connection and build a relationship with an investor. Make sure you show that you have done your research and tailor your initial pitch to be relevant to them; familiarise yourself with their portfolio, background and interests.

Persistence pays off

The majority of investors and fund managers will receive hundreds of emails every week from entrepreneurs vying for their support. The ones that stand out from the crowd are the determined business owners who don’t give up at the first hurdle.

Related: How to pitch to a venture capitalist – a Growth Business guide

Running an investment fund doesn’t leave much time for admin but when it comes to answering emails, it’s positive to see that keen entrepreneurs have followed-up if they haven’t heard back from you straight away.

On the flip side, there is a fine line between persistence and harassment. You don’t want to get ahead of yourself and annoy an investor by emailing them every day. You can decide how many attempts is too many, but as a guide, three emails over two weeks will suffice.

Tell a story

There’s often a lack of human connection when it comes to pitches – charts and spreadsheets might include some key information, but they don’t tell an investor why you’ve started your business, how you got to where you are and the lessons you’ve learnt along the way.

Effective storytelling is one of the best ways to engage an audience. If you turn your pitch into a story, you will make your business memorable, which is a big bonus because investors can sit down with multiple entrepreneurs every day. Tell the investor about you, your history and what inspired you to start your own business. Remember, they’re not just investing in your company, they’re investing in you, so it’s important they believe in you as well.

Be honest

Once you get in front of a potential investor, an essential part of your pitch should be about establishing credibility and trust, both in you and what you’re doing. The best pitches will take the investor through failures as well as successes, and the lessons learnt from the experience.

Investors are effectively taking a chance on you and your business, so if you have made mistakes, can’t answer every question or your figures aren’t quite what you’d like them to be, don’t hide the truth, shy away or exaggerate the numbers.

An investor will know if you’re trying to avoid a particular line of questioning and it will lead them to wonder what else you’re not telling them. Respect their intelligence and be up front.

Understand your sector

You need to have as much information about your sector as possible. Investors will want to hear that you know your industry inside and out – what’s the market size, what’s the market value, do you have competitors, what are your competitors doing in the space, what does your audience look like, etc. These are all important questions that you should know the answer to.

Investors will expect you to be the expert in the room when it comes to your industry, even if they have invested in similar sectors, so it’s your job to educate and inform, giving them as much information as they need to help them reach a decision.

Be realistic

One of the most important questions business owners need to ask themselves is “how much money should I ask for”? Some entrepreneurs will start with a huge sum and overestimate how much they will actually need, while others will underestimate their requirements in fear of putting off an investor by asking for a larger sum. Neither strategy is likely to result in success.

When sizing your request, you should consider your company stage, the type of investor you’re pitching to, investment terms, what you’ll be using the funds for and the projected return on investment. It’s no easy task – if you’re greedy or change your request under pressure, you will be at risk of losing your credibility – but it’s one of the most crucial factors when it comes to securing investment.

Welcome conversation

While you should always go into a pitch with a compelling presentation, it shouldn’t take up your entire meeting. Investors love to talk, so let them. Invite them to comment and ask questions, and don’t be afraid to talk less. Pitching can often be a very formal process, but it shouldn’t feel forced or be an uncomfortable encounter for either party. A pitch should be a conversation.

You don’t have to be a sales whiz or a great public speaker to wow an investor, you just need to know your market and be able to demonstrate your value. At Fuel Ventures we specifically look for ambitious entrepreneurs with businesses that have the potential to scale globally into multibillion-pound markets.

Getting in the room is one thing – when you can successfully capture an investor’s attention, give them an air-tight business plan, tell an inspiring story and back up your numbers, you will have a truly compelling pitch.

Mark Pearson is the founder of investment fund Fuel Ventures

Also see: How to successfully pitch your business idea – tips on how to build a punchy investor presentation and condense it into a 30-second elevator pitch.

The post Tips on how to pitch to potential business investors appeared first on Small Business UK.

As an entrepreneur, it’s crucial that you understand the scope of the funding landscape. You wouldn’t start your business without knowing the market and your customers inside out, and the same approach should be taken to investment.

Often, entrepreneurs can become so preoccupied with chasing funding that they lose sight of the bigger picture. They don’t fully consider which funding source is the best fit for their business in the long term.

What is SEIS/EIS investment?

The Seed Enterprise Investment Scheme (SEIS) and Enterprise Investment Scheme (EIS) are a huge part of that funding landscape. They are designed to encourage investment into startups and early growth-stage companies through offering tax incentives to investors.

Investors can place a maximum of £100,000 (SEIS) or £1,000,000 (EIS) per tax year in return for equity.

Tech startups in particular can snap up a lot of this investment – the higher startup failure rate in the tech sector means that these businesses can easily prove that investor capital has to be at risk for both SEIS and EIS.

Some organisations that provide operational support to help found startups – for example through mentorship and the provision of a team and other resources – have now launched their own SEIS and EIS funds, including my own company Nova.

SEIS and EIS makes funding for startups more accessible and enables entrepreneurs to tap into a bigger pool of capital.

When theSEIS/EIS fund is an offshoot of an organisation that is already committed to helping entrepreneurs, the benefits are amplified:

• Encourage larger sums of investment through helping to lower risks of startup failure
• Deploy funds more regularly
• Help foster a better relationship between fund managers and entrepreneurs
• Ensure the fund is used in the best way possible.

In return for equity, SEIS/EIS can alleviate a lot of the headaches and unblock many of the barriers that entrepreneurs face.

Read: EIS and SEIS are foreign concepts to many business owners

Easier access to capital

SEIS and EIS are purpose-built vehicles for innovative startups to receive investment. The tax wrappers offered to investors exist to increase the amount of money available to startups, while also removing some of the barriers to access. If we consider the other funding options available to startups, many carry some sort of risk or barrier which prevents access to funds.

• Bank loans can be a source of readily available funding for startups. However, this may require entrepreneurs to utilise their existing assets as security against the loan in case they can’t pay it back – for example, their house. This degree of risk could act as a big deterrent for entrepreneurs, particularly those with a young family. Alternatively, they may not own assets of enough value to secure the loan against.
• Rallying friends and family to invest – often the first port of call – also carries significant risk and potentially requires a lot of convincing, in the first instance. If the business fails, their money will be lost and that’s a big risk, mental barrier and emotional burden for entrepreneurs to take.
• Likewise, with angel investors, the personal connection might be there but it still requires a lot of convincing to get them to part with their money.

Generally, it’s hugely wealthy individuals who would seek to use SEIS/EIS. If you can find somebody who fits this category – this could be an angel investor, and in theory could also be friends, family, or an acquaintance – then SEIS/EIS can calm down some of the things you might be nervous about as an entrepreneur, such as putting someone’s capital at risk.

The tax wrapper acts as a sweetener and could lessen the blow of any losses, ultimately helping to soothe some concerns and making it easier to convince investors.

Read: How can my small business make the most of tax reliefs available?

Less risk = more investment

When a startup specialist has its own SEIS/EIS fund, that risk can be reduced even further. This is because when the organisation itself is working with the startup, committing time, resources, and experts to it, it’s less likely to fail. (Nova’s startups, for example, are five times more likely to succeed than the average.)

This reduced level of risk is much more attractive to investors, giving them the confidence to invest more through an SEIS or EIS fund – creating a much bigger pool of capital for entrepreneurs.

Timely deployment of funds

Rather than relying on external SEIS/EIS funds that might only deploy twice a year, operating their own fund enables startup specialists to deploy investment more regularly, which means startups do not have to waste time chasing other forms of investment.

Less regular injections of funding mean that startups can often run out of fuel before reaching critical milestones. For tech startups in particular, where profit is often not a realistic target for the first few years, releasing SEIS/EIS funds more regularly could be a lifeline.

Where investment is the only means of financing a business pre-profit, it can help tech companies to reach important initial growth metrics, such as daily/monthly active users or retention rates.

Direct connection to fund managers

For any type of SEIS/EIS investment, the process for entrepreneurs is the same: they pitch to the fund manager.

When a startup specialist has its own fund (which operates as a standalone entity), the benefit is that the fund manager is not some remote figure with no previous knowledge of your business. Instead, they will understand the business models the entrepreneurs are working on and there will easy access between them.

Ultimately, this will help to increase an entrepreneur’s chances of a successful pitch, particularly early on in a startup’s lifetime, as the fund manager will be able to more easily identify progression and potential.

Making SEIS/EIS work harder

Finally, entrepreneurs benefit when a startup specialist manages its own SEIS/EIS fund because they will ensure the capital works harder. They too have a stake in how the startup performs, so they don’t help secure investment and then take a step back. A co-founding company will play an active role in ensuring the fund is utilised to maximum effect to make the startup a success.

Alistair Marsden is chief marketing officer of Nova, which has co-founded over 80 tech startups to date and generated over £100 million in shareholder value

Further reading

150 UK small business grants to apply for right now

Looking for finance? SmallBusiness.co.uk is working in partnership with trusted lenders to help you find the best business funding deals. Find out more here.

The post 5 reasons why SEIS and EIS are the best funding routes for tech startups appeared first on Small Business UK.

Starting a business is a dream for many – and they are likely to be thinking of launching without obtaining any funding from third parties.

Mike Ellis, founder of digital marketing agency 43 Clicks North, started his company over a year ago without any funding. Here, he shares his top tips so you can do the same.

Understand your costs

When starting your business, you should already have an understanding of your costs. What do you need to spend to get your business up and running? We can all agree that the last thing a business owner wants to do is fold after three months because they underestimated their initial costs.

Make a list of all outgoings so you can budget, including:

• Materials
• Insurance
• Cost of products/services
• Expenses
• Staff/outsourcing
• Marketing

Overestimate at this point – it is better to expect to spend more and have money left over than be scrambling around to pay suppliers.

Know what you need to survive

When starting any new business, time is a valuable asset. You need time to grow a business and you need education to keep it going. Most people don’t have the luxury of giving up their full-time job right away.

The first major step a new business owner will take is going full-time. To do this, you need to know how much you can survive on. I believe that one easy mistake you can make is wanting to leave only when you can earn as much or more than your previous role. Chances are you won’t be able to do so right away, so this could postpone the launch of your own business unnecessarily.

Look at your bills and outgoings, strip back all unnecessary expenses to the bare minimum and make this your target income. Once you reach this amount, quit your job.

Be patient and willing to sacrifice

Things won’t happen overnight – without funding it is likely you will run every aspect of the business and thus will take longer to develop it.

“Without funding it is likely you will run every aspect of the business”

It is likely you will need to live for longer on the bare minimum than you want to, meaning you miss out on social occasions and other aspects of life. Stay patient and on course – you will reap the rewards from this later down the line.

Invest before you make money

Someone once said to me that when you don’t have money you don’t miss it. What they mean by this is that once you have the money to grow, either with new machinery or additional staff, do it. Don’t sit back and enjoy the additional cash as there is still way more work to do.

Once again, time is valuable. Buying new machinery that reduces time and reduces costs allows you to grow. Additional staff take workload away from you, allowing you to go out there and grow the business. Both are better than being able to afford a couple of nights out or some new clothes.

Identify milestones where you can make your next investment. For me this was when I could hire my first member of staff. When you reach this goal, go ahead and do it without hesitation: you will be glad you did.

Ask for help and advice

No one gets anywhere without help. Thinking the opposite is naïve. Go out and speak to people who have been there and done it. People want to share their success stories so some of the advice you get will be invaluable. You may also find that many will help you get going in other ways.

I was fortunate enough to be offered office space, the use of software and introductions to relevant people as a result of seeking advice. It’s safe to say that I wouldn’t have got where I am now without support. People really are amazing once you ask them for help.

Seek out people who you can help in return – most people are willing to offer advice for free, but it doesn’t mean you shouldn’t offer something to them too. And is someone asks you for help, make sure you oblige and keep the wheel turning.

How three entrepreneurs started with no funding

Anna Jordan talks to three small business owners about their experiences of foregoing funding when starting up their own businesses.

JP Lockwood

JP Lockwood launched Deskmate after discovering that most ergonomic standing desks simply aren’t stylish. He recently got the push to take on the business full-time.

My business partner Arthur and I met at an incubator/start-up bootcamp in late 2016. We were both working out of a co-working space after finishing the course.

The downstairs space was affordable but cramped – it was busy and there were no desks available. At the time Arthur was suffering with neck problems and was told by his osteopath to invest in a standing desk to help alleviate the pain. We did some market research and found that there was an abundance of ergonomic furniture available, priced between £200 and £1,000. It was all clunky, static and overpriced. We spotted a gap, started Deskmate and here we are today.

I only left my job recently. The business I was working for fell into some financial trouble and staff were let off. It prompted me to refocus my effort on what I love: running my own businesses. I’ve learned that there is no right time to take the jump, I was fortunate enough to have been pushed.

Managing cash flow is tough. When you start out, I’d recommend having at least four to six months’ living costs saved so you don’t have any financial pressure. When we started Deskmate, I had none of this and was forced to work in order to pay bills, eat and live. Now – two years down the line – I’m in a much better position and cash flow is easier.

We bootstrapped at the start. We bought a few units, built a website ourselves and got out to market. I think it’s important to fund the business at the right time. For us it means we launch, get Deskmate out there quickly and spend some time really knowing what direction the business is going to take. Now we know (roughly) what we are doing and we haven’t lost any of our equity.

You forego a lot without funding, but you gain a lot as well. I’d say make sure you have a plan, a minimum viable product (MVP) to launch with and to go for it. Any funders would require this anyway and if you can get at least an MVP out to market, it’s a great start.

Grace Sherriff

Grace Sherriff initially made cards for norma&dorothy as a fun side project. She never realised that they would become so popular.

I have a fashion design degree and so like any art graduate I had boxes upon boxes of fabrics, buttons and papers just calling out to be used. I made a couple of Mother’s Day cards and listed them on Etsy – looking back the photographs were terrible quality, just taken on my phone.

They sold within a day or two and I remember how great it felt posting those first few orders. I quickly had to make more stock to keep up with demand and before I knew it, I was selling cards to customers all over the world.

I had no idea how many would sell and had to quickly learn about custom forms and delivery policies. After the success of the Mother’s Day cards I added in birthday and wedding cards which were just as popular as the first range and grew from there.

I left my full-time job as a designer about 12 months after working on norma&dorothy in an ad hoc way. I spent my evenings and weekends on the business unless my job was particularly demanding –  in this case norma&dorothy would be put on the back burner.

I realised that without taking the plunge and working on the business full-time, it would never get past the point of being a ‘hobby’ that provided a little extra pocket money. I knew the timing was right as I could not stop thinking about the possibilities of norma&dorothy, especially during my day job. I had so much passion for what I was doing that not quitting my job was simply not an option.

“Without working on the business full-time, it would never get past the point of being a hobby”

Don’t put your head in the sand with the finances on slow months, though – you need to be realistic about what is coming in and going out of the business. Likewise, on good months – when there are plenty of sales coming in – it can be easy to feel like your business is very ‘cash-rich’ but this can be a false sense of security.

My advice in that case is to really understand when your tax and VAT is due so that you can plan this into your spending. Have a good understanding of your overheads and variable costs too.

In the early days I used savings to get the business up and running, there wasn’t too much to buy at the start and using my own money seemed less risky. I probably spent around £500 in total on items such as a printer, a few materials for samples and props for photography.

The business has always been set up in a way that we produce items to order, so we receive the money before we need to spend on materials. It’s very efficient with little waste or need for upfront spending.

Any advice for entrepreneurs without funding?

Be frugal with your spending – there’s no need for a fancy office space or designer chairs in the early days of a business. Try to buy second-hand if you can.

Devise a plan of what you absolutely need to buy right now and what can wait for six months. Look at your return on investment: establish how long will it take you to pay off a machine vs what income it could generate, for example.

Martina Mercer

Martina Mercer runs her own website, sundaywoman.com, but still does other work to help keep the site largely ad free.

I was looking for a community of like-minded women – women who were career-driven but also parents, women who still had desire and a need to feel sexy while juggling life.

I could only find magazines that focused on one area at a time: either careers, parenting, relationships or hobbies – nothing that blended them all together. It was as if you couldn’t have a career and be a parent and still have an active sex life, while enjoying the finer side of life.

That’s when I decided to create Sunday Woman. Who are you on a Sunday? Are you a parent, juggling the odd email and planning a date night? Are you enjoying a trip to the theatre, planning a holiday or organising packed lunches for the next day?

It’s a complex magazine for complex women as none of us can fit into one box.

Moving on from a hobby
I began Sunday Woman as a hobby alongside a full-time career. I didn’t want the pressure of funding as I didn’t have the time to invest my time to match the investment.

“I didn’t want the pressure as I didn’t have the time to invest my time to match the investment”

Thankfully, Sunday Woman grew organically: the more original content I posted, the more people visited and it’s now at a stage where I don’t need funding. I am considering a partnership or franchise opportunities, but time is my limitation.

Deciding on a domain name
I wanted a domain name that sounded familiar but also had scope. Sunday Woman covers everything you are on a Sunday and is the ideal read for the day of supposed rest!

Working towards goals
I still work as a marketing consultant for a number of websites, so I haven’t really left my full-time job. That is the aim one day.

Cash flow has been simple as I didn’t (and still don’t) want Sunday Woman to be full of ads, and so I made the decision that it didn’t need to make a profit for the first year.

Now, I have a lot of people offering a lot of money to advertise, and I have to turn most of them down as I’m still keen to keep it virtually ad free.

We make the money in other ways, such as sponsored posts, social media, product reviews, gift guides and holiday reviews. We’re quite stingy and only allow one link in a sponsored post and the content has to be informative, not promotional. We have a couple of little advertisers on there, but I can’t stand pop-ups and rollover ads.

It needed the investment of my time rather than money and now it pays for itself and then some.

Maximising your free time
Don’t give up your day job! If you’re passionate about the new business, start it in your free time – evenings, weekends and during your lunch break.

This way you can test the waters and see if your idea has legs before taking a huge gamble and focusing on it 24/7. Identify the revenue stream early and set targets to scale this up quickly. As soon as your business pays for itself, you can work out if it would also pay for you.

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