New Internet Business

poppin_2

Hi all,

Background
I currently work full time but are in the process of putting together an online venture with 2 of my colleagues. The idea takes very little to run on a day to day basis and all the resources (server) required are already in place. We are launching in April and have put together a launch package for the business which includes attending trade events and general promotion. We are in the process researching grants and business loans to fund the launch which would be several thousand pounds.

Question
We are a little concerned about loaning money to aid the business as should things go wrong we would be in trouble financially with our current salary and more than likely be unable to repay the loans. This has caused us a little confusion as to what would be the best form of business to setup e.g. a partnership or a limited company.

Any advice appreciated.

Thanks

motorguy

poppin wrote: »

We are in the process researching grants and business loans to fund the launch which would be several thousand pounds.

We are a little concerned about loaning money should things go wrong

You will struggle to get a business loan for the same reason as you dont want to lend the business money - what happens if things go wrong?

Grants too are hard to come by as you're not employing people up front, so theres no real reason to give you grants.

I guess its down to how much you believe in what you're doing. If its several thousand pounds you need, this must surely work out at a little more than £1000 each?

Also, could you 'soft launch' the business with limited advertising until such times as it generates revenue of its own?

RobertoMoir

Pretty much everything Paul says. I understand completely why you'd be reluctant to invest heavily in an idea at the moment, but assuming you need to get the money from somewhere or other if you don't front it yourselves, why would a bank or other investment firm (especially right now) believe in your business more than you do?

As for the decision whether or not to go limited or stay as a partnership, that's a tricky one that is probably best answered by a professional that you're paying to look into what you're doing in detail and advise you rather than random interweb peoples from a forum.

Going as a limited company might help keep your personal and business finances separate, but somewhat increases the complexity of your business structure. A simple partnership is less complex but increases your personal exposure if the business does tank, or if there are problems with the other people in on the idea later. There's good and bad to both and no single "right" answer I'm afraid.

lcharm

Just out of curiousity you've described someone I know through a friend who is also working full-time and starting an internet business with colleagues.

Does it have anything to do with "food" by any chance?

poppin_2

pgilc1, RobertoMoir
I understand what you are both saying, I honestly do believe in the idea but simply do not have the resources to through at it at this point in time. A "soft launch" might be the only way forward unless we can raise some money which seems unlikely, which is a shame as the tradeshow would have been a massive, unexpected boost for us!

lcharm
Weirdly enough it is "food" related.....:eek:

lcharm

i'm getting warmer then! Want to give any clues?

save-a-lot

I am entrigued too. Please let us know more.. if sensitive, post the URL to this thread after the launch

RobertoMoir

poppin wrote: »

pgilc1, RobertoMoir
I understand what you are both saying, I honestly do believe in the idea but simply do not have the resources to through at it at this point in time. A "soft launch" might be the only way forward unless we can raise some money which seems unlikely, which is a shame as the tradeshow would have been a massive, unexpected boost for us!

I honestly don't know how likely banks are to lend at the moment. If you show a good business plan with some reasonably firm figures and which shows investing to get a rapid start up for a trade show might be worth a punt. If they say "no", it isn't like you'll have lost something you currently have is it?

In any case, I certainly wish you good luck, hope your idea works out!:T

Debt_Robot

You may have to consider borrowing from family/friends/your own savings.

The way the things are with banks these days makes it even harder to get loans unless the bank is sure your idea make you pay them back quickly.

If not, you may have to put off launching for a while if you cannot get the loans from family/friends/savings.

I know it sounds disheartening but cash is the most important part of a business.

Good Luck!

lcharm

To cut a long story short. Are you or any of ur partners called Raj?

poppin_2

Icharm
My name is not and I do not know anyone called Raj, although it sounds like I may already have a potential competitor before I have even launched, Ha Ha I realise this is highly unlikely as food could cover a host of business areas I guess, but this has spurred me on further to launch sooner rather than later before "this ship sails" so to speak.

Thanks all.