If you own your own business...

[BecketShyer]

Hi!

Currently in the process of setting up my own business.

I know how much money I need, but I have no capital of my own I can invest. I would be hoping/looking for a dragons den style investment.

Has anyone had any experience of setting up their own business in this way?

I think most investors would be looking for sone kind of investment from you OP.

A lot of local chamber of commerce and similar have business workshops and meetings you can look into for professional beginners advice.

Worth googling your local council and start up advice.

JiltedJohnsJulie

Thats what I fear. I'm happy to give over a portion of the business, obviously. But unless I have the full amount, I can't get started. So I could crowd fun/source maybe £30k but I couldn't do anything with that 30k as we need the full amount to get going. I'm wary of crowdfunding too as I worry my idea would be taken. It's not something that is easy to patent/copyright.

I will look up the chamber of commerce, thanks!

Most start up loans I've seen are well under £30k.

No idea how you could get that without starting something.

A working prototype, a kick starter campaign, a related business with a bigger end goal.

Is there no way you could start smaller?

How much money do you need?

Take a look at Kickstarter

Wow how much do you need? Crowd funding is cheeky as fuck for this purpose I think.

In the current market, unless you can get a bank loan or put in your own cash you are on to a loser.
If your business plan is good, the bank will support it and others will follow them in
but with Brexit looming you need a deeply cynical financially astudte to stress test your ideas

I see too many people reinventing the wheel
especially the square one

We need 100-150k.

If I did a kickstarter I worry we would be putting the idea out there for other people, who would potentially have the funding to set it up straight away.

I don't think there is any way we could start smaller, but perhaps there is. Perhaps we need to go back to the drawing board and think about it from a smaller point of view, though again, I run the risk of someone seeing our idea, thinking "oh thats good, but it needs to be bigger" and doing it before we get a chance.

My business partner and I think if we got an investor to commit to £150k, we would be able to make that back in profit in just over 2 years, so the return on investment should be quite good. (But i'm sure they all say that on dragons den too don't they!)

File the idea with a solicitor
then you have proof for if others try to steal your idea
BUT
how hard have you looked to see if anybody is already doing it - there is very little new under the sun

for "angel" capital, you are best tapping personal contacts
but it WILL be tough
start small and then work up

An investor will want to see you have sacrificed for the business before they put a penny in.

I don't know anyone who would put that amount of cash into an untested idea.

You need to start way smaller and build up.

Can you say what industry it is you want to start in?

If we did crowd funding we'd be able to offer something very cool in return of course. But I just don't think it's viable for our idea.

@Ta1kinpeece we are really mindful of Brexit :( We don't really know what it would mean for the sector we are hoping to go into, but I guess nobody knows really.

We are definitely not reinventing the wheel, more bringing the wheel to the people. It's essentially a business model that works exceptionally well in other major cities and areas, but there is a gap in the market in our location and nothing similar exists. Yet, anyway.

People are already doing it, some better than others, But nobody where we are and we are going to push the concept on a bit.

If you are in ANY sort of services I do not understand why you need manufacturing levels of start up capital

If your idea is not new and novel, NOBODY will 'angel' you

Sorry to be pessimistic, but I am a tax accountant after all

Ta1kinpeece don't apolgise, we need all the help and advice we can get.

It is a service we are offering, but we need to invest before we can offer it.

It is not a trampoline park (or even particularly similar in terms of offering) but the initial set up is possibly quite similar. We need a big space (which we will rent obviously), we need to adapt the space and then get the equipment, otherwise we don't have the business.

If you feel brave, PM me and I'll have a think as I've helped various clients clarify and fund their ideas ;-)

Thanks @Ta1kinpeece I have done so!

So you want 100-150k for free for a business that isn't proven?! Good luck with that.

Once you've got a decent business plan it might be worth trying the UK Angel Investment Network www.angelinvestmentnetwork.co.uk/ or a similar organisation for fundraising. Alternatively you could look at joining an accelerator programme.

It is proven in other areas of the country @ileclerc and has the potential to make an investor a fair bit of money over the period of 5-10 years. So yes, initially we need the capital, but it would be paid back.

I just have no idea how else to do it!

Thanks @auntievenon do you have any experience using that organisation or anything similar? Am googling accelerator programmes now.

Be wary of crowdfunding unless your project is suitable for it. The ideal crowdfunding project is already realised to a certain extent but needs funding for the final push. If those that support your project could be described as customers placing an advance order, then that's a suitable Kickstarter project. Anything else is tricky - I've seen a lot fail trying to do anything different.

If we use you example of the trampoline park. That's not a good Kickstarter/crowdfunding style of project. All you could offer in return for their contribution would be advance tickets or season passes - that limits potential backers to those that live local enough to take advantage. And you're essentially trading cashflow now for less cashflow later. This type of project is better funded with a business loan or a Angel. Both of these will need a detailed business plan.

If your idea was a method of making a better trampoline, you'd done design and testing of a prototype, and you needed the funds for CE mark approval, production tooling and the initial production run then this would be an ideal type of project for Kickstarter/crowdfunding. Your offer to backers would be a physical item (the trampoline) and the act of backing you would be the placing of a contract for a trampoline to be delivered at some point in the future.

If others are doing the same thing elsewhere, are they doing it as independents or is there a dominant brand or franchise in the market? - the risk being that you end up trying to develop a better Coca Cola and get kicked six ways to Sunday by their experience and market clout as soon as they notice you.

There are ways of valuing "the idea" behind a business, but if others are doing the same elsewhere there's no uniqueness. If the start-up costs are £100k and you think your margin is potentially £50k p/a then as a ballpark you'd be giving at least 40% of the business to the investor that provides the £100k. The more you ask for or the less realistic that margin figure then the greater the share you will need to give up. Most investors would also expect you to be taking a risk and investing a substantial amount yourself - their investment is more secure the less easy it is for you to jack it in and run away.

@BecketShyer not that particular Angel network but I have experience of similar organisations in other countries (I'm not in the UK). They're a good way to access a lot of smaller investors (typically £10K - £500,000K depending on the network.)
The % you'll be expected to give away is going to very much depend on the type of business you're looking to set up & the stage you are at. The earlier you are the more you'll be expected to give up (generally speaking).
Remember, the effort needed to raise £1,000,000 is the same as raising £100,000.
Like @DogInATent says though, you'll need to show you're putting in £££ as well. If you haven't got £££ some investors might expect you to put up your home.
Make sure you do your due diligence on any investor - it's a 2 way relationship. Even if some investors don't always see it that way.
Good luck!