Business and new launches are increasingly turning to different funding sources as banks tighten their purse strings, but do you understand the various options open to you? Here we look at one option, which is called crowdfunding.

In basic terms a crowd of people contribute towards an online funding target in return for a small stake in the business idea. Where one large investment may have proved too risky, in this model many smaller investors will hopefully be more willing to put in a lower investment eventually equalling the sum required.

There are things to be aware of such as the commission (around 5%) that you will need to pay the crowdfunding website once your target is met, and to attract investors you may be encouraged to offer incentives such as discounts or equity in the business. However, think about this. By having investors, especially those with a stake in your business, you will have a support network in place who will want to promote the business, possibly use the product or service and perhaps offer you their expertise. In addition, reaching the target not only gives you the required investment, but sends out a message that you have a good business idea which, combined with the fact you received your investment, makes a great news story!

Outsourcing is worth billions of pounds every year and yet there are still businesses that shy away from it due to misconceptions, which we will aim to clear up here:

Outsourcing can be too constricting

In the past it is true that some companies found themselves tied up in long-term deals with outsourcing companies that ultimately proved uneconomical and unflexible for the business. However, this is a thing of the past, and today we see shorter contracts and flexible terms dictated by the customer that result in more productive, successful relationships. Early ‘get-out clauses’ are also common.

Not only is a business plan an essential part of setting up a business, it's actually one of the first things you should do and, very importantly, has to be done right if it's to be of any use. This is why it's often best left to the professionals to ensure your business plan will work hard for you, for example, getting the funding you need to launch your business. Don't think that you won't need a business plan just because you're not seeking a loan as your plan will also help you think through all areas of your business. Think of it as a roadmap to success navigating you through the inevitable ups and downs of entrepreneurship.

Here we look at why you need a business plan - a well written business plan that is.

 

Setting up a Business – your business plan will enable you to see the steps required to start your business including what needs to be done and how you will go about achieving your aims.

Is it a Feasible Idea? - by setting out your financial forecasts and identifying your target market you will be able to see if you have a sound business idea.

Naming your business. We've all been there. It's one of those guaranteed moments in starting a business. What are we going to call the business? From experience I know that what seems like a straightforward task can actually end up being one of the biggest headaches you'll face in setting up a business. You're trying to convey what your business does in a name that sounds appealing, but that fits all the many criteria you will have been told to follow - make it easy to remember, easy to spell and so on.

Then, of course, there's the website. There's a good chance the domain name is gone already, so do you keep going until you have a name that also has a web domain available or do you slightly change the domain name. For example, if it's a magazine do you add 'mag' to the domain name or 'UK'.