Need help in finance but in a predicament!!!

TMProject

I really hope someone can help or point me to the right direction!

- I am at the pre-startup phase of my business.
- I have paid for some things and need a further £3500
- I have bad credit
- I have been unemployed for over 3 years
- My businesses is consultancy B2B, so does not fit under most categories of lenders (manufacturing, innovation etc)
- I do not qualify for the New Enterprise Scheme as I am on the Work Programme!
- I live in North London (I point this out as East London has schemes for only their area!)

I'm angry of the fact that I want to come off the JSA system, but the financial help offered to people wishing to become self-employed is crap!!!

I hope someone can help, as I want this to work, I am NOT giving up!!!

Thanks, in advance.

By the way, I have used friends and family for help and have used up that resource, hence the fact that I have paid for some things already!

Savvy_Sue

What sort of thing do you need finance for? That might help people give suggestions.

TMProject

Savvy_Sue wrote: »

What sort of thing do you need finance for? That might help people give suggestions.

Hi Savvy_Sue

Thanks for responding to me.

The finance is needed for technical equipment, advertising and marketing, web development, professional fees etc.

I hope that answers your question.

paddyrg

What technical equipment? Can you rent it? Dearer short-term but frees up capital, and capital is something you don't have. What professional fees specifically? Other categories you just need to get creative - paying thousands you don't have for advertising and web development would be insane. If you think you need them before you can get work you're cruising to fail - advertising is notoriously hard to get right and hard to measure its efficacy. What happens if they don't bring in the numbers in your early months? Borrow more for more advertising?!

What kills businesses is cashflow - you can be owed tens of thousands, but if you can't pay your rent you're stuffed. Your plan at the moment sounds exactly like you're going to open the doors on day one and pray you get the business in to sustain you. It won't work that way - if you can't get the business without glossy spend, it ain't going to happen. Get the clients now, deliver a service and start saving for promotion once you're cash positive and know the marketplace better. Do you have a business plan with cash projections in it? Are they based on reasonable assumptions?

The fact you have poor credit suggests you may not be great with financial planning, and that lenders won't go near you - count this as a blessing, and build the business from the ground up without depending on a deferred cash injection. Once you're cash positive and stable lenders will be interested in you again if you need expansion money for instance.

My 2p

Annisele

I've done some consultancy work through my own limited company, but I never had to pay a penny in advertising. I got my first client before I left my employed job, and after that I didn't need to advertise - my first client very kindly did a fair bit of that for me.

You might find that once you get started, advertising becomes completely irrelevant. People are far more likely to hire you because their friend told them you're good, than they are because they've seen a glossy advert or a website. (I didn't ever get round to building a website either; I was getting enough work without).

I'm not doing consultancy work anymore - so in that sense you could say my business failed - but that's because I came across an employed job that I really wanted to do. My old clients still ring every so often to see what I'm up to, so I think I must have been doing something right.

COOLTRIKERCHICK

totally agree with paddy

I have seen people who start up in business, They want the office, the gadgets etc that they THINK they need...

Tbh apart from any legally required licenses or equipment, then don't bother with any of the 'frills'


In business you normally find the ones that didn't have grants etc to start up normally suceed.

I personally don't believe in grants, as from personal experience its only the 'big boys' that manage to fit the criteria, and they get 100's of thousands in grant money.

It does sound as though you are blinkered now in 'thinking' you need the 3.5k

Step back... have a cuppa and get the pen and paper back out, and start again.. and write down the bare basics you could start with,

Also don't forget money isn't going to come flooding in the minute you start your business, so you will have to work out what you are going to live on?

gb12345

As others have said - you don't need 3.5k+ to set yourself up.

You don't say what type of B2B consulting you do or who your intended clients are, so obviously we can't give you accurate advice/information, but here is my take on what you need (based on 10+ years of consulting experience).

1. A laptop - £300 - £400 max, unless you are planning on running some seriously processor hungry s/w on it.
2. Professional Indemnity insurance - a couple of hundred quid probably.
3. Costs of setting up a LTd company (if you're going that route) another couple of hundred quid.

You don't need a fancy office, just a room at home.

Website - I set one up myself all it costs is about 50 quid a year for hosting and registration. If you haven't got the skills to produce one yourself then you will find someone on a freelance site who will knock you up a site with a few pages for £100 max.

Advertising - really depends on the type of client you are looking to work with, but shouldn't cost a fortune.

Wywth

TMProject wrote: »

Hi Savvy_Sue

Thanks for responding to me.

The finance is needed for technical equipment, advertising and marketing, web development, professional fees etc.

I hope that answers your question.

Not really.

What technical equipment. How much?

How much of the £3.5k will go on advertising & marketing. How exactly will this be targeted?

Web development Again how much and what exactly will it be for (other than advertising & marketing)

Professional fees? Which ones exactly and how much are they?

Pennywise

I'd echo what others have said.

I set up an accountancy practice on a shoestring - literally just an old pc and printer and free/shareware software. Just a few pounds on stationery etc. I used a free web hosting firm and free website at first, backed up with home made leaflets, cards in shop windows and a few weeks of advertising in the classifieds of the local paper.

Obviously, I had to be very careful to only take on work that I could do at that time - I didn't have resources to take on any large scale or complicated work - and things took a lot more time to do without the proper software.

But as time passed, I could buy more efficient software, better printer, scanner, etc., and could therefore open up to more lucrative work, and then upgraded my website and advertising accordingly.

It is amazing what you can achieve on a shoestring - you just have to work harder at it in the short term. One of my clients has built up a online retail business with a turnover of £1.5m and net profit of £500k p.a. over 4 years from a standing start and just a few hundred pounds behind them. Started at home, bought some stock, sold on ebay, reinvested in more stock - after several months bought a domain and got cheap web hosting and wrote their own website, and then just expanded from then on.

You need to get started with what you've got and work your way upwards to the business you want it to be.

terra_ferma

TMProject wrote: »

I really hope someone can help or point me to the right direction!

- I am at the pre-startup phase of my business.
- I have paid for some things and need a further £3500
- I have bad credit
- I have been unemployed for over 3 years
- My businesses is consultancy B2B, so does not fit under most categories of lenders (manufacturing, innovation etc)
- I do not qualify for the New Enterprise Scheme as I am on the Work Programme!
- I live in North London (I point this out as East London has schemes for only their area!)

I'm angry of the fact that I want to come off the JSA system, but the financial help offered to people wishing to become self-employed is crap!!!

I hope someone can help, as I want this to work, I am NOT giving up!!!

Thanks, in advance.

By the way, I have used friends and family for help and have used up that resource, hence the fact that I have paid for some things already!

First of all well done and good luck. First of all well done for starting up in business.
The first thing I would say is that it's very difficult to give advice without knowing the details, every business is different and you will hear a different opinion from each person you speak to.
My recommendation would be to think outside the box, you may not necessarily have to spend money to get some of things you need.
Or if you really need the money to start up perhaps you can start on a smaller scale than anticipated and then grow, with a scalable business model.

Have you thought of raising private finance through a business angel (dragon den comes to mind unfortunately , but there are people who invest in small businesses).
This is a starting point: http://www.ukbusinessangelsassociation.org.uk/

Unfortunately I can't give much advice on how to raise £3500, but I hope someone will come along and give you the advice you have asked for

Mistral001

The OP has the right attitude about not giving up, but maybe he/she has to go about it in a different way. Is the equipment all that important as others have said? Can it be put off for a while until some money comes in and? Most small businesses actually do not build their businesses on borrowed money anyway and very few start with government grants. This is totally contrary to what we hear in the media and what people are taught at business schools.