So, you’ve got a great business idea and are rearing to go, but there’s one thing missing ... funding! Navigating business funding can be daunting, but you can find success if you know where and how to resource funds. Con Kittos, Executive Chairman of Asuria People Services. shares his tops tips on how to secure funding to give any business idea wings to fly!
1. Asking family and friends
Asking family and friends for financial support can be an excellent way for small businesses to get the funds they need to get off the ground and grow. From loans to investments, family and friends are often willing to help out in order to see a loved one’s business succeed.
2. Finding investors or taking on a partner
Sometimes loans from family and friends can be a good start; but you may be pushing the envelope in borrowing larger amounts, and that’s when finding an investor who could share in the ownership of the business in exchange for much-needed capital is a good option.
Finding the right partner can offer access to additional capital, and more. A partner with the necessary financial resources and business expertise can provide otherwise inaccessible funds.
They can also offer valuable insights to help achieve business goals. It's crucial when partnering to ensure clear terms, agreement on decision-making and profit distribution, and clarity on each partner's roles and responsibilities.
Though beneficial for business growth, partnerships are long-term commitments and shouldn't be taken lightly.
Finding investors or a partner is challenging, requiring extensive research, networking, and effort.
Potential investors must be identified, approached, and convinced of the venture's potential. A well-structured business plan detailing the venture's goals, strategies and a comprehensive financial plan with realistic projections is essential.
3. Applying for grants
Applying for new business grants is a great way to get the funds you need to get your business off the ground. Firstly, find out if your business is eligible for financial support through the Self-Employment Assistance program, delivered by Asuria, here.
Grants can provide vital capital to help businesses launch, expand, or restructure. Each sSate has its own small business grants to support start-ups and scale-ups, a few include -
New South Wales: . Local Innovation Network (LIN) is a $2.1 million commitment by the NSW Government to develop regional entrepreneurship and support startups and SMEs in seven emerging regional locations.
Victoria: Future Industries supports job creation in high-growth industries including medical, new energies, food and fibre and construction. The Small Business Digital Adaptation Program allows businesses to apply for a $1200 rebate upon purchase of a digital product to build digital capability.
Queensland: For training and accelerator programs explore Startup Onramp Regional Queensland Program. While the Business Basics Grants Program provides support to help increase your core skills and adopt best practices.
Australian Capital Territory: Innovation Connect Grants (ICON) supports entrepreneurs to develop and grow ideas. Grants usually range between $10,000 and $30,000.
South Australia: The SA Venture Capital Fund (SAVCF) provides a portion of the initial startup funding, with the rest needing to be matched by other funds or investors.
Western Australia: The New Industries Fund is an initiative to support and accelerate new and emerging businesses. There are several programs you can explore. Keep an eye out for the City of Perth grants as they become available.
Tasmania: Business Growth Loan Scheme provides concessional loan funding to support businesses to recover and adapt and allow new projects that contribute to employment in Tasmania.
Northern Territory: Business Growth Program helps businesses, not-for-profits, and Aboriginal enterprises receive support from grants and funding outlets.
4. Send me an Angel
Angel investors fund startups and small businesses in exchange for equity or convertible debt. They typically focus on early-stage, high-growth potential companies, expecting a return on investment within 3 to 5 years.
Investments usually range from $25,000 to $500,000. Angel investors come from diverse backgrounds, including entrepreneurs, venture capitalists, executives, and other wealthy individuals.
They often provide more than capital, offering mentorship, industry connections, and advice. They frequently form networks or syndicates to pool resources and knowledge. This is standard practice in Australia.
5. Press the Accelerator
Startup accelerators and incubators offer a range of benefits to entrepreneurs looking for short-term growth, such as seed capital, training programs, offices or coworking spaces, cohorts and pitch/demo days.
These resources are invaluable for businesses, as they provide the necessary support to help them get off the ground.
Through networking with other innovators and engaging with potential investors, entrepreneurs can gain the confidence and resources to make their ideas come to life.
A few of the best start-up accelerators in Australia include:
H2 Ventures: Founded in 2013, H2 Ventures is a Venture Capital fund that operates the H2 Accelerator, Australia’s only dedicated fintech, data, and A.I. accelerator.
Founder Institute: With over 200 cities and 5,000+ startups funded to date, it’s undeniably one of the most critical startup accelerators worldwide.
Innovyz: Australia's largest and broadest industry commercialisation group assisting product, service and software organisation to commercialise their product offering. As a mentor for the ANZ Innovyz START accelerator program, I'm proud to share that we've helped 33 companies successfully bring their products to market within the first two years of the program.
6. Consider Line of Credit and micro loans
Lines of credit are a great way for small businesses to get access to funds when needed.
They offer flexibility and convenience and can be used for a variety of purposes. Interest rates on lines of credit vary depending on the lender, but typically they are lower than those of other types of loans.
In addition, many lenders offer lines of credit with no collateral requirement, making them accessible to businesses with limited resources.
7. Credit cards can be used to finance short-term expenses or to bridge the gap between income and expenses
Credit cards are a useful tool for financing short-term expenses or bridging the gap between income and expenses.
But be careful; the interest rates are excessive, and it’s easy to get into trouble by overextending yourself.
8. Utilise Crowdfunding Platforms or Peer-to-Peer Lending Platforms
Crowdfunding platforms, such as Kickstarter and GoFundMe, are an invaluable resource for small businesses looking to raise capital.
By creating campaigns on these platforms, entrepreneurs can gain access to a global network of donors who can support their business ventures.
Peer-to-peer lending platforms, such as Prosper and Lending Club, are online services that facilitate direct lending between individuals.
These platforms allow borrowers to obtain loans at lower interest rates than those offered by traditional banks. Lenders can also earn higher returns on their investments than they would through traditional banks.
Both crowdfunding and peer-to-peer lending offer a safe and secure way for individuals to borrow and lend money without having to deal with traditional banks.
However, alternative lending is much more expensive than traditional bank loans.
Asuria is the second largest employment services provider in Australia, helping entrepreneurs get their businesses off the ground, supply job and business coaches, and helping the youth and disadvantaged secure the right position.