Start-up funding

Start up costs | Savvy Mums Business

The costs of starting a business vary hugely in terms of the type of business, the industry or area in which it operates, and the owners’ priorities, motivation and attitudes.

Some people start with nothing more than a free website and some home-printed flyers. Others require millions of pounds in investment to get their plans off the ground. Whether you need a lot or a little to start or grow your business you have to consider where the money will come from and assess your approach to financial risk.

No matter how much money you have access to you should plan carefully what is needed (and why), and get several prices/quotes, before spending any money.


Many people start their small business using some personal savings or a redundancy payment, or by borrowing from their personal bank account overdraft or credit cards.

It’s best to keep personal and business funds separate as much as possible. So if you’re using personal money to cover your start-up costs decide how much you need, then allocate it to the ‘business’ in one go and make a note in your accounting records.


A grant is a sum of money for a specific purpose which doesn’t have to be paid back. Grants are often easier to find for start-up initiatives rather than existing businesses. Start-up grants are usually given out by government schemes, local councils, some charities, and local enterprise schemes.

The first places to start are with your local and county councils, as they often fund short-term enterprise grant schemes to encourage people in the local area to start or grow a business – which in turn improves the local economy. If you generally operate or have business premises in another council’s area, contact them as well to find out what’s currently available or planned for the future. As these things come and go, keep checking periodically if there’s nothing right now.

You can search finance support for your business on GOV.UK which includes a grant finder.

Investment & borrowing

As long as you have a promising business idea and good records, there’s no reason why you can’t approach people/ organisations to lend you money or ‘invest’ into your business. Obviously, this will come at some cost, they will want some financial benefit, such as interest on a loan or a stake in your business/share of the profits.

This can be a good way to get funds fast if you need a large amount to start your business and don’t have the money yourself, or if you need the advice or experience that a third party may bring to the table. But it can also mean extra responsibility, more pressure, and less control over your business.

You could look to banks, credit unions, family members, business angels, professional investors or government schemes to borrow from. Just be cautious about their intentions, and be crystal clear on any terms agreed to and requirements you have to fulfil.

Don’t borrow if you can bootstrap – that’s our key message here… If you could actually make do without borrowing then do so. Financial resilience and creativity will see you succeed in the long run.



Crowdfunding is a way of raising finance by asking a large number of people for a small amount of money each. Rather than the traditional route of financing a project by asking a few people for large sums of money – such as asking a bank for a loan. However, it also serves as an amazing marketing tool if you have a cool idea that will spread through social media.

There are three main types of crowdfunding, equity – where people get a stake in your business, debt – where you pay people back with interest, or the most common type is rewards based – people make a donation to your project in return for a reward such as free tickets to an event, or one of your products when it’s launched, or several of your products plus a bonus. Often people can donate in tiers, and the more they donate, the higher the value of the reward you offer them.

It’s fairly simple to get going, you just set up a profile of your project on a website such Kickstarter or Crowdfunder. You then use social media, as well as your network of friends, family and business acquaintances to spread the word and help raise the money you need to get your project started.


Think about how you could do everything more financially efficiently, and consider what start-up costs you really need. Is that photocopier essential? Are you buying certain tools just because everyone else in your industry uses that brand?

Borrowing can cause a lot of unwanted stress, and could lead to debt. Make sure you really do need the extra money before borrowing and be clear about repayments and levels of any interest due.

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