• AskGuru

Need Funding for a Small Business?

Updated: Feb 12

Developing a business from the ground-up is not a task for the thin-skinned or weak-hearted. Starting a company can be the first step towards financial freedom, but achieving lift-off comes with challenges and risks. One of the most fundamental hurdles that needs to be cleared from the get-go is figuring out how to get funding.

New business owners will face a number of difficulties when it comes to securing funds in 2019.

Difficulties in securing funds include:

  • Creating a scalable business model

  • Making plans for the future, and aligning goals with the budget (and vice versa)

  • Determining the right loan amount

  • Finding investors that fit well with the business’s mission statement

  • Building a network with strong connections

Below, you'll find information and insights regarding small business lending trends so you can find how to get funding for your business. Keep reading to discover more!

The small business economy in 2019

If you’re thinking about starting a business, you should be more concerned with having a strong business plan than you are concerned with the state of the economy. A successful business will weather the storms that eventually come, so focus on building a strong business foundation that can resist the sands of time.

If you’re not sure how to go about it, you can start getting prepared with the section below. Scroll down to learn more about why some small businesses fail.

Why do some small businesses fail?

While it’s useful to know how many businesses survive and how many fail, what’s more useful is knowing why some businesses do better than others. Below, we’ll describe six of the top reasons why some small businesses crash and burn.

Top six reasons why businesses fail:

1. Lack of preparation

There’s plenty to prepare for when you’re drawing up plans to start a business. Many small businesses flatline because they simply failed to plan ahead for the demands of running a company. And, on the contrary, every successful venture started off with a reliable strategy for how to remain in the game.

Key points that businesses should prepare include:

  • Assessment of competition

  • A clear mission statement, with specific goals and plans on how to reach them

  • Industry research

  • Marketing and advertising

  • Workforce demands

  • Balancing finances

  • Managing growth

  • Potential obstacles and how to overcome them

2. Lack of funding

One of the most common reasons that small businesses fail is a misunderstanding of how much money they’ll need to keep operating after the doors open. Many new businesses miscalculate their funding needs, not knowing that they’ll likely need to cover the costs of their business out-of-pocket for a couple of years before the company’s revenue grows enough to cover the operating costs.

Now, you’re likely wondering how to get funding for your business. That’s where LoanGuru.ie comes in. Not only does LoanGuru.ie have dozens of lending partners that your business may qualify with, but if you don’t qualify you’ll learn why and gain valuable advice on how to improve your funding odds – for free! You can apply today obligation free to see if you qualify for a business loan from our lending partners.

3. Poor choice of location

As cliche as it’s become, the saying remains true: location, location, location!

Your startup’s success depends largely on whether it’s based in the right area or not. Even the most tried-and-tested business plan would fail if it were located in the wrong place. Think about what services or products you’ll be providing, and whether the demand exists in the area you’re looking to open shop.

Questions to consider when choosing where to open your business:

  • Where are your competitors located?

  • Where are your customers located?

  • How successful have other businesses been in that location? - How is the traffic? - Parking? - Accessibility?

  • Is the area safe? -Clean?

4. Poor online/social media presence

In our world of smartphones and instant access to virtually everything, if your business isn’t online then – for all intents and purposes – it basically doesn’t exist. Okay, maybe that was an overstatement, but the principle remains true. If a potential customer were to hear the name of your business, how would he or she be able to find out more?

Chances are, they don’t want to make a phone call and speak with a representative just to get a clearer idea of what your business is all about. Even the most basic website design would provide clients with the standard info they’d be looking for: what you do, how long you’ve been around, where you’re located, how to contact you, and so on. If your business doesn’t at least have a website, you’re doing yourself a tremendous disservice by severely limiting people’s ability to connect with your company.

If you’ve established yourself a website, the next step is to get on social media. Facebook is the most fundamental of all social media platforms and is nearly as important as having a website. After you’ve set up a Facebook page for your business, you can easily expand to other platforms such as Instagram, Twitter, YouTube and even Linkedin.

5. Issues with management

Management issues are something that most new businesses are confronted with, but many are unprepared to handle them effectively. New business owners are often inexperienced in areas of management which have a critical impact on success and survival, including finance, buying and selling, selecting employees, and so on.

Even if you’ve received formal business education, the practice of managing is a challenge for someone without real-world experience. If you haven’t started sharpening your management skills, start learning today, or be prepared to outsource for the expertise you lack.

Management doesn’t end there. Getting the business running is just the start – as a manager, you must stay up-to-date on industry trends, current events, the state of the market, customer data, etc. This will help you stay focused in the right direction, organised in your business plan, and in control of your company’s performance. If you’ve been fortunate enough to get your business established, the last thing you want to do is put it on the backburner. Lastly, what usually comes to mind when people hear the title ‘manager’ is the person in the workplace that leads the team. The manager should be good at fostering a positive work environment by keeping the energy up, hiring employees that fit well with the team, moderating internal disputes, and continuously thinking of ways to better the business strategy in new and productive ways.

All of these skills come with time and experience, so don’t put too much pressure on yourself if you’re still new to business management.

6. Wrong reasons for starting the business

It’s great to enjoy what you do for a living, but the reality is enjoyment doesn’t pay the bills. Although, the opposite is true as well – getting the bills paid doesn’t equate to happiness in life. Many new business owners see their companies fail because they didn’t start for the right reasons, and failed to do their due diligence before opening shop. You shouldn’t go into business because you want to make a lot of money, or because you’re sick of working for other people. Those are good motivators for action, but not sustainable as reasons for running a business.

Good reasons for you to start a business include:

  • You get back up after being knocked down. A successful business owner isn’t one who just avoids difficulties, but one who can bounce back stronger and learn from the past

  • You show determination in your pursuits and patience throughout the journey

  • You are able to deal positively with people of different walks of life

  • You strongly believe in what you’re doing and have found a need for your service/product

  • You do well at operating independently, particularly under pressure

To help you get started, fill out a free application form on LoanGuru.ie

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