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Financing, skills & planning

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Financing, Skills & Planning

Table of contents


The success of a business may greatly depend on the quality of financial planning and advice. Capital is usually required to purchase equipment, pay overheads (such as salaries and rents) as well as have enough left over to use as working capital. Capital in the form of credit is likewise required to take advantage of opportunities or survive temporary setbacks.

It is therefore important to assess the set up cost as well the estimated income and expenditure figures for at least the first three years of operation. Proper financial planning is an integral part of the business planning process for any venture. A business plan will almost certainly fail if it is not well thought out or properly conducted.

Financial Requirements

1. Start-up Costs (Seed or Venture Capital) – Costs will vary depending on the nature and scale of the proposed business. There are many issues to consider, including licences and permits, registration, professional fees, commercial premises, market research, advertising and launch, recruitment of staff, equipment and stock.
2. Operating Costs – These include rising inventories, payroll/wages, rents, rates, taxes, bookkeeping and accounts, travel, renewal of licences and registrations.

Financial Commitments

Securing the right level of financing for a new business is crucial since there is no guarantee that the business will make money straight away. Therefore, aim to have sufficient reserves and working capital to keep the business going when it is not generating a profit.

It is thus important to secure enough start-up capital reserves beforehand. If there is not enough money to keep the business afloat before it is making a turnover, then it will be imprudent move to start up. Being realistic at this stage is likely to save a lot of pain and aggravation later.

Local Funding Sources

Local sources of finance may include personal savings, loans from family and friends, business angels or partners, commercial lending and overdrafts from financial institutions as well as Government assistance schemes such as EU Funding, Development Aid or Tax Relief on Facade Improvements.

Government/EU Financial Assistance

Government/EU sponsored schemes, loans or grants can be obtained if the proposed project meets the relevant eligibility criteria and contributes towards the economic policy of the region. A range of schemes is available to assist small and medium sized enterprises start up or expand.

Business Skills

Not everyone has the right entrepreneurial attributes and skills needed to survive and prosper in the world of business. Here is where asking friends, relatives or colleagues for their open opinions and views can be constructive. In business, employing the right people with complementary skills, seeking professional advice or contracting out professional services as and when required is a must.

Business Planning

A business plan is often a key component when one is seeking finance or business partners. It is fundamentally a communications tool that is presented in the form of a written document that clearly describes a business venture, its objectives, it strategies, its target market and its financial forecasts.