Business Start Up

How to Finance a New Training Startup in the UK

For entrepreneurs, there’s plenty of information available out there regarding the technical side of running a training business in the digital age, but getting one off the ground in the first place takes something much more basic and often more elusive: funding. Not every entrepreneur comes to the table with sufficient cash reserves to get their new business off to a solid start, and undercapitalization can be deadly for a startup, particularly in the training industry. The good news is that assuming the business’s value proposition is unique and it is likely to generate revenue, there are several ways that startups can secure funding today, including a few that weren’t available only a few short years ago. Here’s a look at the most popular among them.
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Today, one of the fastest growing sources of startup capital in the UK is the booming crowdfunding sector. In fact, projections indicate that new ventures will raise a total of over 68 million pounds in 2019, for an average fundraising amount of close to 10,000 pounds. That amount will bring an average startup in the UK to about half of what it needs to get through its first year of operations. It’s also possible to launch additional, narrowly-focused crowdfunding campaigns, to raise money for technology development (which is an often pricy part of today’s digital training businesses). That’s an excellent route to take for entrepreneurs whose ideas require early-stage funding to reach a level sufficient for a first product launch on the road to profitability.

Seek angel investors

When starting a new venture, there’s a good chance that there will be willing investors that have a decent amount of business experience, and even some with direct experience in the training industry. Locating an angel investor that fits that profile is a fantastic way to kick-start a new business, for a number of reasons. First, the investor can form a critical part of the company’s advisory team and will be well motivated to do everything in their power to help so that their investment will pay off. Second, angel investors normally don’t expect to see a return on their investment for between three and eight years, which gives the fledgling company plenty of time to hit its stride and start earning solid profits. With 79% of UK startups reporting profits within their first year, granting shares of the business to an angel investor in exchange for capital isn’t much of a risk over the long term.

Leverage government schemes

Year after year, the UK consistently ranks as the best place in the world to start a business, because it offers such a business-friendly environment in which to work. One of the ways that the government helps to keep it that way is to provide a variety of programs and incentives designed to promote investment and growth in companies at every stage of development. For example, the government offers a scheme that provides startup capital loans to qualified entrepreneurs that need them, and businesses can attract investors by qualifying for SEIS tax relief, which lowers the tax burden of those who fund the business. Also, there are 82 business grant programs provided by the government at the time of this writing that cover several use cases and locations within the UK. Altogether, there’s ample financial help for anyone looking to fund a startup within the country.

Build and grow

The bottom line is that entrepreneurs in the UK that are thinking about starting a new venture in the training industry can do so, secure in the knowledge that securing the required financing is not only possible, but also very likely. That’s good news when you consider that financing a business is often the second biggest hurdle that entrepreneurs face, after coming up with an innovative product or service. If you’re an entrepreneur that’s getting a new venture in the UK underway, you should now have a decent idea where to begin. Remember, it’s possible to fund your new business through a combination of the methods above, including any number of other private financing methods. The important thing is to be flexible, proactive, and ready to work with interested parties. If you do, you’re sure to find no lack of opportunity and should have everything you need to thrive.