Start-up business finance options?

[babmed]

Hi all,

We began our limited company (two of us), a few months ago and we've been discussing with a web design company a website, which will be our only business asset and without it we have no business (it's all online).

The cost of the website will be £25,000 + VAT. We approached our bank (Barclays), with whom we have our business account for a business loan but without even looking at our business plan said they would only lend us £12,500, and we'd have to find the other half. They'll only lend to us once we've raised half ourselves.

The issue is - for us to generate revenue, we need a website. Without a website, we have no business. So it's absolutely crucial we somehow lend this money.

I know banks aren't lending but are other banks more willing to lend to a start-up? Are there any other finance options open to us?

Any help or pointing in the right direction would be greatly appreciated.

Many thanks,
Rich

 

[finleydesign]

Blimey £25,000 + VAT, are you starting Amazon? I would maybe look at this realistic cost first, most startups can start at extremely much less then this and start investing in growth

Would love to know what your getting for £25K

 

[businessfunding]

I' be astonished if Barclays actually came up with £12,500 based on this as it is currently an idea, not a business

Your best option would be to find a web developer to partner you in the business an do a staged launch

 

[SetupaCompany]

£25k does sound a lot, even for complex sites that require new software development I would usually expect to only spend £10k at the absolute most.

Perhaps looks what the website you are putting together and see where you can save costs - what is essential for launch and what can be added a later date once you have proven the model is working?

If you really do need everything and there is no way you can reduce the cost and if you think your idea is a massive one with huge potential then you could potential seek out some investment firms or individuals who would be willing to invest in the idea in return for some equity.

However, I would say looking at how you can reduce costs to start off small and grow from there is probably your best bet.

 

[Travel Genie]

wow £25K is a lot for a website. Have you thought of outsourcing the project t0 overseas companies i'm sure it will be a lot cheaper.

let me know if might be able to assist.

 

[[email protected]]

Hi

Don't pay £25k for a start-up business website. You should only be considering such an investment when your business model is proven and is out of the start-up phase.

Post the project on a freelancer website such as Getafreelancer and you'll get floods of quotes from UK and world-wide developers. You can see freelancer's feedback and portfolios.

Regards

Rob

 

[finleydesign]

wow £25K is a lot for a website. Have you thought of outsourcing the project t0 overseas companies i'm sure it will be a lot cheaper.

let me know if might be able to assist.

Seriously DONT outsource, if you looking at spending serious money you want to find a reliable web developer that will work with you in the UK and preferably charge you a sensible rate

 

[SetupaCompany]

Seriously DONT outsource, if you looking at spending serious money you want to find a reliable web developer that will work with you in the UK and preferably charge you a sensible rate

Isnt that still outsourcing?


Seriously though I understand what you are getting at. Finding good reliable designers or developers online can be quite tough so be very careful if you do decide to outsource.

 

[finleydesign]

Sorry yes, that was meant to be DONT outsource abroad, we have so many clients coming to us because they made the same mistake

 

[ILilja]

When you say you run an online business, do you mean you are selling an online service or product, or do you just sell your product online? I think especially for the first case, you'll find that many banks are hesitant to lend money to businesses who don't have a physical stock. And since you're a startup, it might be even more difficult. It's such a shame when banks miss out on an investment in the future

I totally agree on the importance of having a website for your business, but wouldn't you be able to start off with a more basic (=cheaper) version of your website and then expand it, as your business grows? I believe you can get started with a pretty cheap and simple Wordpress website (which doesn't look cheap!), for example.

 

[businessfunding]

. It's such a shame when banks miss out on an investment in the future

I should point out that mainstream bans aren't investors, they are lenders which means that their primary focus is recovering money, by installments over (say) a 3 year period - which doesn't stack up at all in this case.

If the project really has legs, then it might be an investment opportunity, which basically means giving away a slice of equity to an investor who is seeking substantial gain in the longer term, but nothing in the short term.

 

[Talay]

Sorry yes, that was meant to be DONT outsource abroad, we have so many clients coming to us because they made the same mistake

Had a look at your and thought you'd like to know you've got broken 404 links in your website http://www.finleydesign.co.uk/small-business-websites/

Some of the formatting for that page doesn't look at though it is formatted correctly either, with type overwritten on other words. Perhaps it is not optimised for Chrome ?

 

[Billmccallum]

Had a look at your and thought you'd like to know you've got broken 404 links in your website http://www.finleydesign.co.uk/small-business-websites/

Some of the formatting for that page doesn't look at though it is formatted correctly either, with type overwritten on other words. Perhaps it is not optimised for Chrome ?

I got the 404 error on this link, using IE9.

 

[Billmccallum]

Is the £25K all the start-up cost or just the web site cost???

No lender will offer 100%, anyone would expect you to have 30% as a minimum, but in the current climate getting an offer for 50% is quite good.

 

[benjaminedwards]

Hi Rich,

I am a web designer / developer based in Warwick. Please may I ask what your site involves to get a quote for that price? PM if you like. Thanks, Ben.

 

[finleydesign]

Had a look at your and thought you'd like to know you've got broken 404 links in your website http://www.finleydesign.co.uk/small-business-websites/

Some of the formatting for that page doesn't look at though it is formatted correctly either, with type overwritten on other words. Perhaps it is not optimised for Chrome ?

Aha, thanks for the heads up, now been sorted!

 

[Metalfrogboss]

Depending on the type of website £25000 seems expensive. However, may I suggest that you find out if you have any enterprise companies in your area. In ours it is NWES.org and they offer funding to start ups. In addition I am a District Councillor and our Council offers match funding for online marketing. Again, think about the site cost in relation to how much you have to push your site on Google.,If u are not simply relying on referral to get people to it it is likely you will need a decent online marketing budget. One final thought is business angels who may invest in you with a solid business and marketing plan. Organisations like Angels Den may help you.

 

[Metalfrogboss]

I agree with finleydesign. Definitely don't outsource overseas!