- Last Updated on 31 August 2012
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Most businesses need extra funding at times. The important thing is to know whether additional finance is needed because the business is expanding and requires more resources, or because things are going badly and the operation is running out of money.
The credit crisis and recession have made getting finance tougher for micro and small businesses, but that does not mean that raising money is impossible.
Banks, investors and business angels are always open to the suggestion of backing well run businesses with a strong sense of direction and good management team.
There are various sources of finance, but where to go to depends on whether you have a tried and tested business, or whether you are relatively new without much of a track record.
Starting a new business
If you’re starting a new business, it can be difficult, but you can find finance. There are a number of sources, i.e., you yourself, friends, family, your fellow partners and fools. Yes fools! Fools are people who may lend you some money without you having a concrete plan. If they are friends and if your business fails, they won’t be friends for too long.
I remember being at a talk given by Harry Crosbie a few years ago and when asked about raising finance, he said that a real entrepreneur will always have some money themselves. Possibly because of their entrepreneurial spirit, they will always save some money.
Be careful borrowing off your family also because they may not have the ability to examine your business plan properly and to ask you the right questions. Questions that will make you think.
The banks here in Ireland are saying that they are lending to SMEs. I think they may be, but their rules are much more strict and some of our clients have received money. You have to pass all their criteria one at a time and you cannot move on to the next one until you pass the previous one. It’s like driving along a road with a load of traffic lights. You can’t drive to the next one until you get a green light.
Finance from banks comes in the form of loans, mortgages, overdrafts, leases and hire purchase.
Another option from banks is invoice discounting.
Managing your finances
- Cash-flow is the main killer of businesses and if you don’t get it right from the beginning, it will be more difficult later on. The Synergy Group will help in this area.
- Delaying payment to your suppliers can give you short term cash. But this has its dangers.
- Recovering debts due to you that may be old.
- Shrewd tax planning
- Improve your business performance. Encourage innovation and become more efficient at doing the right thing.
- Can you get a royalty for something you own or invented.
- Angel investors.
- Business incubation
- Merge with another company
The above are a few areas The Synergy Group can help you with
Call The Synergy Group to get a free overview of your situation and we will advise you on a way forward. Then, if you wish, we will hold your hand to make sure it works.
T: +353 1 8215189
F: +353 1 8215191
M: +353 87 2326927