Revenue streams to start a business

Starting up a new business in any sector will require a large chunk of capital to be invested. There are several expenses that need to be taken in to consideration when starting a new business, including the ongoing rent of the establishment you are set up in. In addition to this, initial costs such as marketing, advertising and setting up inbound communication systems will also take up both time and budget.

It is often considered best practice to have various revenue streams, when setting up a new business, so as not tie all your needs in to one source.

Personal Savings

Many individuals find it difficult to find the required capital they need, as lenders will often consider new businesses, with no previous trading experience a high risk. Consequently, it is very common for those making the jump into business ownership to use their personal savings for such a venture. When dipping in to personal savings, it is wise to ensure you have enough left over working capital for at least a year after your set up date. The remaining funds you have left over after all the needs of your new business have been covered should leave you with funds that cover the cost of vital payments including, your mortgage, and/or insurance requirements.

Claiming Back Mis-sold PPI

Payment Protection Insurance was mis-sold to individuals up and down the country, and more and more people are realising that they are owed a refund. Claiming back any mis-sold payment protection insurance will not taint your credit score, but is a revenue stream that is often overlooked. In addition to this, the premium you may receive will be tax free.

Banks and Credit Unions

Any bank or credit union that you approach will require you to have a solid business plan, as well as a clean credit history. Although banks tend to have a very strict criterion before they lend to individuals, some banks will be more lenient on their terms than others. It may be a good idea for start-up businesses to target those with “Small Business Administration (SBA)-guaranteed loans”.

Borrowing From Friends and Family

Borrowing money from friends and family can be a secure and fast way of obtaining the necessary funds you require. In addition to this, you will not have to make an application, or wait for approval. However, individuals should ensure that they still set up a clearly defined contract that states the terms of repayment, including time limits and any necessary interest that may be accrued.

There are multiple revenue streams that new businesses may tap in to, but the specific advantages of these will vary, depending on the unique situation of the individual in question. The advantages and disadvantages of any type of revenue stream should be thoroughly researched. In addition to this, it wise for individuals to narrow their search down, to reflect the most appropriate repayment plans for their circumstances.