The potential for failure when creating a start-up can be high and severe. The need for constant cash-flow and a steady stream of money coming in is what will help any new business to survive. The techniques for getting the needed cash flow within a business can vary, depending on the size and nature of the industry and individual business type, however it still remains that regardless of the business, money is still king.

So, how do we fund a start-up?

The shoe string

The answer does not have to be complex or costly, the funding of a start-up can be done on a shoe-string if the people managing and involved in the day to day tasks are committed to ensure a sustainable organisation now and into the future.

The use of equipment such as personal computers and second hand furniture can save money and ensure that there is money in the bank, when a supplier is impatient. The ability to be bold and ask for help can save thousands of dollars a year. Remember that commercial property that you through was out of you price range, well the technique of being up front and honest can sway people into allowing a cheaper rent.

The bank loan

To obtain money from a bank, there are a few things that are needed. A bank is not going to lend money to a start-up with no form of collateral, to be successful in getting the loan a person will need more than just a great idea, they will need a home. The use of the family home may seem daunting, however can be the difference between a business gaining traction in the market and falling over. It is important that you understand that the use of a loan means regular repayments with no concern to the success of the business. This means that if the business fails the loan will still need to be payed back, however if the business is successful then the same repayments are required. The consistent repayments can be seen as a positive or a negative, depending on the situation of the business.

Seed funding/Investors

This may be the hardest to obtain, to get funding you need not only a good idea you need to be the right person with a good idea. An investor is looking not only at the product or service, they want to know that they are investing in the right person. The right person that matches the business, if an investor does not think that you have the right temperament for starting a coffee shop, then they will not be too keen on handing over money, where they think there is a good chance of failure. The investor is investing in you as much as they are investing in the start-up.

The general way an investor makes his money is through a portion of success from the business, if the business succeeds then the investor will earn a percentage of the profits. However if the business fails the investor does not receive any of their money, and you do not have to pay it back.

The use of an investor means you must be willing to let go, This means that you are handing over a portion of the ‘control’ in your business, if you are not willing to do this then an investor relationship is not for you.

This is but a few ways in which you can get your business started, with the use of technology the implications of using markets such as gofundme.com has enabled a whole new form of funding to become available to a whole range of new products and services.