Num­ber-crunch­ing is key for new firms

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START­ING a busi­ness? Work out how much money you need for the best chance of suc­cess.

Con­sider the cost of stock, equipment, premises, mar­ket­ing, staff and paying your bills un­til your ven­ture turns a profit. You can fund all of this your­self, but there are also many ways to raise start-up funds.

Con­stantin Ni­co­lau bought the InX­press ship­ping fran­chise in North Birm­ing­ham in Septem­ber 2018 be­cause he wanted to swap his ex­ist­ing haulage busi­ness for one with a bet­ter work-life bal­ance.

InX­press fran­chises nor­mally cost £32,500 for a start-up in a new area, but Con­stantin had to raise over £100,000 to buy the ex­ist­ing busi­ness.

He says: ‘I re­mort­gaged my house and asked my bank for a loan, but my po­si­tion meant I didn’t meet their cri­te­ria.’

So he de­cided to use the trad­ing power and as­sets in his ex­ist­ing busi­ness to help him raise funds.

‘I got loans from a peerto-peer lend­ing plat­form, Fund­ing Cir­cle, which con­nects busi­nesses with in­vestors, and raised money from an as­set fi­nance spe­cial­ist against ex­ist­ing busi­ness as­sets,’ says the 42-year-old. If you are start­ing a fran­chise in a new area, fran­chisors will typ­i­cally expect you to supply a third of the in­vest­ment, but many can in­tro­duce you to lenders.

It helps if you choose an es­tab­lished fran­chise, have a good credit record, some col­lat­eral and a solid busi­ness plan.

InX­press, works closely with HSBC. See gb.inx­chise-opp or­tu­ni­ties/. Other fund­ing sources in­clude Fran­chise Fi­nance ( fran­chise fi­nance. co. uk) and ac­coun­tants D &T (­ing).

Check if you can get a gov­ern­ment-backed Start Up Loan of £500 to £25,000 with a fixed an­nual in­ter­est rate of 6 pc ( star­tu­

Suc­cess: Con­stantin

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