Obtaining funding for new business

Curtisin

Hi all,

I was hoping to get some help or ideas on where to turn next.

I'm looking to obtain funding for a business idea of mine for a retail store in the city centre of Cork. However, to start off the business on the right foot, a large amount of cash is required to start the business. I've got a number of years of experience in this field, so I'm relatively confident that it will be profitable.

My conservative estimate is that within the next 5 years, it'd be able to employ 3 fulltime staff, a couple of part timers, and that there would be enough left over from that, to start expanding and opening a new outlet in a different city.

However, the hurdle so far is that €100,000 is required. The banks seem willing to push in about €70,000 of this, but they require me to provide the remainder €30,000.
As I don't own a house, I unfortunately can't obtain the money from loaning on that. (In fact, I have no debts at all at the age of 34).
It does however leave me in a bit of a pickle, as I have no way of obtaining the €30,000 on my own.

Does anyone know where I could turn to?

Thanks in advance,

daviecronin

Curtisin wrote: »

Hi all,

I was hoping to get some help or ideas on where to turn next.

I'm looking to obtain funding for a business idea of mine for a retail store in the city centre of Cork. However, to start off the business on the right foot, a large amount of cash is required to start the business. I've got a number of years of experience in this field, so I'm relatively confident that it will be profitable.

My conservative estimate is that within the next 5 years, it'd be able to employ 3 fulltime staff, a couple of part timers, and that there would be enough left over from that, to start expanding and opening a new outlet in a different city.

However, the hurdle so far is that €100,000 is required. The banks seem willing to push in about €70,000 of this, but they require me to provide the remainder €30,000.
As I don't own a house, I unfortunately can't obtain the money from loaning on that. (In fact, I have no debts at all at the age of 34).
It does however leave me in a bit of a pickle, as I have no way of obtaining the €30,000 on my own.

Does anyone know where I could turn to?

Thanks in advance,

Sell your soul.... hahaha Joking of course! It sounds like an interesting idea what kind of store will it be? Does the city not already have one?
Good luck with it!

Curtisin

Hi,

It is a hobby retail store. There are currently 2 of them in the city, but they are both appear to be run more as "family and friends" type of endeavours, being kept fairly loose intheir approach, rather than a focused/professional effort, which I know from past experience will make a difference.

daviecronin

Curtisin wrote: »

Hi,

It is a hobby retail store. There are currently 2 of them in the city, but they are both appear to be run more as "family and friends" type of endeavours, being kept fairly loose intheir approach, rather than a focused/professional effort, which I know from past experience will make a difference.

It sounds interesting! As in hobby store? think me silly but something with arts & crafts or?

modmuffin

Hi

Have you contacted your local enterprise office (formerly county enterprise board). They have business priming grants and the likes that might be suitable?

Alternatively, you might be able to beg, steal or borrow from friends & family or bring in an investor / partner for your venture

Sent you a short private message with some info.

All the best

M

Curtisin

Hi,

Think more along the lines of Toy Soldiers, Board Games and that sort of thing, plus what I hope to be a large emerging market (as it's a great hit in the rest of europe), but I'm keeping that one to myself

pedroeibar1

Curtisin wrote: »

Hi all,

I was hoping to get some help or ideas on where to turn next.

I'm looking to obtain funding for a business idea of mine for a retail store in the city centre of Cork. However, to start off the business on the right foot, a large amount of cash is required to start the business. I've got a number of years of experience in this field, so I'm relatively confident that it will be profitable.

My conservative estimate is that within the next 5 years, it'd be able to employ 3 fulltime staff, a couple of part timers, and that there would be enough left over from that, to start expanding and opening a new outlet in a different city.

However, the hurdle so far is that €100,000 is required. The banks seem willing to push in about €70,000 of this, but they require me to provide the remainder €30,000.
As I don't own a house, I unfortunately can't obtain the money from loaning on that. (In fact, I have no debts at all at the age of 34).
It does however leave me in a bit of a pickle, as I have no way of obtaining the €30,000 on my own.

Does anyone know where I could turn to?

Thanks in advance,

Really? You are 34, not a householder, you have no savings yet you say you have found banks to lend you 70k or 70% for start-up costs? Frankly I for one do not believe that.

Bandara

pedroeibar1 wrote: »

Really? You are 34, not a householder, you have no savings yet you say you have found banks to lend you 70k or 70% for start-up costs? Frankly I for one do not believe that.

Agreed

I'd be astounded if the banks put up more than 40%

What they said they would do and what they will do are miles apart usually.

You'll find they want personal guarantees for the funding and possibly unencumbered cash held in escrow.

daviecronin

Curtisin wrote: »

Hi,

Think more along the lines of Toy Soldiers, Board Games and that sort of thing, plus what I hope to be a large emerging market (as it's a great hit in the rest of europe), but I'm keeping that one to myself

That sounds like a great idea! Retro kind of hobby/toy shop! It sounds like a great idea! I haven't seen much like it in cork city actually. What location were you looking at? In the city centre or outside a bit? I wish you the best of luck with it. I would also recommend contacting your local enterprise office they're very helpful in my area anyway!

Gloomtastic!

Hobby stores are huge business in the UK. Never understood why they never caught on in Ireland.
Don't forget about pensioners. They are a huge potential market for you. All that time on their hands.....

Curtisin

Bandara and Pedroeibar:
I'm well aware that "seem willing to" does not equal "will do" on the behalf of the banks. That is however, the initial response I've gotten from 2 different banks at this point, and what seems to be the norm for most others out there.

However, since you do not seem to believe that banks would be willing to invest in it, perhaps you'd be able to come up with alternative ideas on how to obtain this sort of cash?

pedroeibar1

Curtisin wrote: »

Bandara and Pedroeibar:
I'm well aware that "seem willing to" does not equal "will do" on the behalf of the banks. That is however, the initial response I've gotten from 2 different banks at this point, and what seems to be the norm for most others out there.

However, since you do not seem to believe that banks would be willing to invest in it, perhaps you'd be able to come up with alternative ideas on how to obtain this sort of cash?

Your naivety is remarkable. Setting up a business of any description is a serious project, not a whim. Were you to treat this as a project, you would have done more homework and posted something considerably more detailed than the following superficial comments that show a lack of understanding of basic business concepts.

Curtisin wrote: »

I've got a number of years of experience in this field, so I'm relatively confident that it will be profitable.
My conservative estimate is that within the next 5 years, it'd be able to employ 3 fulltime staff, a couple of part timers, and that there would be enough left over from that, to start expanding and opening a new outlet in a different city.

For starters, most businesses fail because the proprietor is undercapitalized and overconfident in his/her own skillsets. A hundred grand is nothing when opening a retail outlet and providing a cushion of working capital.

Secondly, because of costs, retail depends on part-timers, not fulltime staff. If you did not know this you are not experienced in retail, so talking about 3 fulltimers is another reason to think you are overconfident.

Thirdly, a five year plan may as well be written on toilet paper because it will be meaningless. One of the long-established businesses that I’m involved in has had this year’s plan blown out of the water (3 months ago) because of just ONE event.

Fourthly, to start planning (or even thinking about) a new outlet in another city before you have even opened the first business is the hallmark of a dreamer.

Looking at the sector, (models/toy soldiers/crafts) that is an area that is ideally suited to e-commerce and does not need retail premises in a city location. Just look at Prince August Moulds. Additionally, people today spend time playing Warcraft, not making the models. They play board games online via Xbox - What happened to Hasbro in Waterford?

Your ‘dealings’ with financial institutions are naïve in the extreme and show a total lack of knowledge of dealing with financial institutions/investors. You have no hope in raising €100k from any financial institution or even €50k back-to-back on your own €50k (were you to have it!) No bank/institution will lend you that type of money for an untried first-venture start-up. From the content of what you have posted here nor would you find an investor in the private sector, unless you have relatives that you want to eventually lose.

Pie in the sky, unreal, what makes you think that you are so special that you deserve to be given €100k?
Blunt, but in your circumstances anything else is just waffle.

pedroeibar1

delahuntv wrote: »

Banks are far more willing to lend into the retail market now that they were even 6 months ago. I've secured good funding (unsecured and over 100k) at a rate of under 6% for expansion and the decison came within a week with fiunds transferred a week later - last year a much smaller amount of funding took me 4 months to finalise with the exact same institution!
So Banks ARE lending if the idea and the people behind the idea are good! So after my very recent and very positive experience, I wouldn't be surprised that banks are willing to lend.
As for finance - get an accountant, draw up a 3 years business plan. See if the accountant thinks the money is the right ammount needed. and try and get friends and relatives to invest under an EIIS scheme. They get up to 41% in tax rebate (30% can be in one year or spread over 3 years and then there's a bonus 11% at the end of 3 years if you have created employment) - amounts can be small too. So if somene invests €500, then the max loss they face is €350 (30% tax rebate) - but potentially they can sell back their sahers to you for a similar price they paid and gain 4% return by way of tax refund.

If you are opening, make sure its November to ensure you get the Christmas rush - Christmas trade / profit can sustain you in the lean months!

On some of the comments above - different businesses need different amounts, Dreaming of second and third outlets is great - its shows ambition. I opened a retail outlet in 1999 with 20k of my money 30k from the bank and a good story for suppliers and got 30- 60 days credit from most - I had two outlets fairly quickly then a further 2 and very luckily had the leases bought out about a year before the crash, took time off, went back into retail in 2010, again invested less than 100k as spent most cash on a couple of properties. Have a new store opening in 6 weeks & I'll turn over in excess of €4m this year.

So €100k is more than enough to start a retail business and yes banks are lending if you can show you are a good risk.

As someone who has regular dealings with banks on both funding and deposits (like many others here) your post is quite wide of the mark when dealing with a guy like the OP in his first venture, a new business / business idea, no track record and neither seed capital nor equity.

But reading your post obviously you are a real genius. With your experience and the money you say you have I'm looking forward to seeing you put your money where your mouth is, bankroll this project and then report back to us.

Bandara

pedroeibar1 wrote: »

As someone who has regular dealings with banks on both funding and deposits (like many others here) your post is quite wide of the mark when dealing with a guy like the OP in his first venture, a new business / business idea, no track record and neither seed capital nor equity.

But reading your post obviously you are a real genius. With your experience and the money you say you have I'm looking forward to seeing you put your money where your mouth is, bankroll this project and then report back to us.

There's bluntness and there is rudeness

Your crossing the line imo, this is a forum for support. Dreamers come here regularly and get savaged, but in the right spirit

Sneering and wayward unnecessary aggression have no place here. I'm not a moderator but your attacking people to boost your persona. Tone it down, this forum has been a sometimes harsh but always honest and respectful place.

Thank you

pedroeibar1

Bandara,
Thank you for your contribution but I do not agree with what you have written. If you dont like my comments, report me, that is what the button is there for. The response on which I commented was totally inappropriate to the OP & my response, inaccurate and OT. In my response I was perfectly clear to whom it was addressed. I have no need to 'boost my persona' as you suggest, it's just fine the way it is thank you.

A growing issue with this forum is the marked difference between the content of some posts and what a reasonable expectation of advice /comment should be. If 'dreamer posts' that are totally unrealistic are not given an 'honest' response this forum is a waste of time.

Nor is it a worthwhile suggestion that futile posts should go unchallenged - because if that happens anyone with something constructive to contribute will just not bother to look in here anymore, as the forum will degenerate to dross being posted by people who have just taken a notion to consider starting cupcake businesses in their kitchens, sweet jar businesses in their classrooms or recruitment agencies without even knowing the basics of remuneration structures and expect people here to do their research/homework for them.

So how do you think the OP should approach applying for 100% finance for his start-up?

just pete

Have you looked at Micro Finance Ireland

Curtisin

Thanks for the idea just pete, but unfortunately, from what I can tell, Micro Finance Ireland only provides for businesses between €2K and €25K. Someone suggested the County Enterprise Board in a private message, so I'll be having a look at that.

pedronomix

pedroeibar1 wrote: »

Bandara,
Thank you for your contribution but I do not agree with what you have written. If you dont like my comments, report me, that is what the button is there for. The response on which I commented was totally inappropriate to the OP & my response, inaccurate and OT. In my response I was perfectly clear to whom it was addressed. I have no need to 'boost my persona' as you suggest, it's just fine the way it is thank you.

A growing issue with this forum is the marked difference between the content of some posts and what a reasonable expectation of advice /comment should be. If 'dreamer posts' that are totally unrealistic are not given an 'honest' response this forum is a waste of time.

Nor is it a worthwhile suggestion that futile posts should go unchallenged - because if that happens anyone with something constructive to contribute will just not bother to look in here anymore, as the forum will degenerate to dross being posted by people who have just taken a notion to consider starting cupcake businesses in their kitchens, sweet jar businesses in their classrooms or recruitment agencies without even knowing the basics of remuneration structures and expect people here to do their research/homework for them.

So how do you think the OP should approach applying for 100% finance for his start-up?

Well said indeed sir!, It will be unpopular but nonetheless is the truth. An all-inclusive social conscience, touchy feely, "early school leaver" flavour is what is apparently the ideal on here these days. You must never ever hurt anyone's delicate feelings by smashing their dreams. Written communications that embrace the time honoured and well established cultural use of mirth, humour, wit, sarcasm, parody and satire are to be avoided, along with blunt honesty when dealing with the "poor misfortunes". Teach' don't like it!!


PS School kids giving advice to go an Enterprise Board for retail outlet assistance is a new low. The Enterprise Boards have been disbanded !! The LEO network has replaced them and are the place now NOT to go for such retail store assistance!!

Bandara

Bandara wrote: »

There's bluntness and there is rudeness

Your crossing the line imo, this is a forum for support. Dreamers come here regularly and get savaged, but in the right spirit

Sneering and wayward unnecessary aggression have no place here. I'm not a moderator but your attacking people to boost your persona. Tone it down, this forum has been a sometimes harsh but always honest and respectful place.

Thank you

He maybe too scathing sometimes but he is correct. Its annoying reading that post from Delahunt as if its actually possible for this OP to get the kind of money from a bank, when its a totally different situation.
The difference between an expansion and a new business being financed is night and day to a banker for so many obvious reasons.
Nor is the enterprise board going to fund even 1% of a business like that. Perhaps he can go visit them for a pep talk but thats about all he's going to get.

So one guy here has made a realistic post, and done his best to shake the OP out of the delusion of obtaining finance from a traditional/established source for something like this, while many of the others are in fact sending him on a wild goose chase and talking total nonsense. I know which one I would prefer to receive.

The Corinthian

Bandara wrote: »

There's bluntness and there is rudeness

TBH, I roll my eyes, more often than not, when I hear complaints of rudeness.

Sometimes a metaphorical bucket of cold water is the best thing you can do to someone who is ready to take a serious jump into the commercial unknown with little more than overconfidence, idealism and naivete, because subtlety is simply not going to penetrate the fantasy they've built around them.

More than a few of us remember our first ventures and wish someone had been 'rude' to us too. Would have saved us a lot of trouble and money.

Gloomtastic!

As far as I am aware, and the mods can confirm this if they wish, Boards is open to all. You are free to post topics and you are equally free to reply, or not. With very few exceptions, no one is being paid to be on here so personally I feel that, as I tell my kids all the time, 'if you can't say anything nice, say nothing at all'.

Just my 2 cents, carry on please.......

pedronomix

Therein lies the nub of the problem and the issue at hand, this is a business and enterprise forum not a child rearing discussion group.
I am sure there is another forum on boards about decoding/analysing dreams, might be more appropriate.

Gloomtastic!

pedronomix wrote: »

Therein lies the nub of the problem and the issue at hand, this is a business and enterprise forum not a child rearing discussion group.
I am sure there is another forum on boards about decoding/analysing dreams, might be more appropriate.

But is it really a problem? If you think the poster is a time waster, ignore them.

pedronomix

A lot more people read the threads than actually post on them and their take aways need to be considered too. It is a wider mistake to let rubbish go unchallenged and on occasion the original OP might stop, put their brain in gear and start thinking properly, but clearly not all of 'em!

Axwell

pedroeibar1 wrote: »

A growing issue with this forum is the marked difference between the content of some posts and what a reasonable expectation of advice /comment should be. If 'dreamer posts' that are totally unrealistic are not given an 'honest' response this forum is a waste of time.

Nor is it a worthwhile suggestion that futile posts should go unchallenged - because if that happens anyone with something constructive to contribute will just not bother to look in here anymore,

Both of these are valid points but these arent the issues with the forum lately. This post isnt aimed at you but in general to regular posters on here. People are free to post here looking for advice regardless of their age, how many years in business they are or how little they might know about business at the stage of posting. If people are going to respond to these posts its expected that those posts bring something to the conversation, whether its a helpful response or a criticism that might open the eyes of the poster that they havent thought things through fully or they arent at the stage of the business they think they are.

Either way the common theme across boards is if you have something critical or negative to say attack the post not the poster. There is too much petty nonsense on here lately, bickering and tit for tat on threads which derail them from the original point. People that decide to make smart arse comments and pass it off as 'humour' fully knowing their intentions are just to stir **** and continue to derail the thread, posts to threads which bring nothing to the conversation of value either positive or negative, and posts that start as criticism and then just turn to personal abuse.

Most of the hassle and reports made on here for the mods to deal with are always about a few posters who seem to consider themselves on a pedestal to everyone else and for some reason that its ok to just say what you want. If someone has an issue with a post you report it, you dont take matters into your own hands and start some tit for tat back and forth, you dont decide based on someones age its ok to ridicule them because you are older, and if you think the purpose of the forum is just so you can sit here waiting to jump on posts and shoot people down then you are in the wrong place and need to move on.

This forum has been running long enough without any hassle and any moderation was mainly on spam or advertising posts. Lately its dealing with stupid posts and this kind of nonsense. People dont have time for it, so simply cut it out or move to AH and amuse yourselves there.

Gloomtastic!

Gloomtastic! wrote: »

personally I feel that, as I tell my kids all the time, 'if you can't say anything nice, say nothing at all'.

Just my 2 cents, carry on please.......

Ask yourself though where is the benefit in being nice in this kind of case?

How much time is the OP going to waste preparing his business plans, getting all excited and then hitting a brick wall everywhere he goes for finance?

It reminds me of when I was just out of college, and decided I wanted to open a casino(gaming club) in Dunlaoghaire, given of the success of the ones in town at the time. Went into the bank, asked for half a million euro or something on the back of a business plan and a "But its a great idea!", and basically nothing else. The banker nicely told me that they wouldn't be able to finance such a venture.
What would have been much more useful is if she had pointed out the idea of going to a bank and asking for large amounts of money with no track record, no collateral, no cash, was completely ridiculous. It would have helped me a lot getting future loans and not making the same mistakes. I only learned these things properly by trial and error. The bank is not the dragons den, and not even a dragon would fund something with only air behind it unless you were a superstar of an individual. Its a friends/family financing play only.

Now when I go to the bank for a business loan, I know exactly what I need to meet to get it. Thats pretty golden knowledge for an entrepreneur. Its saves time, money and dreaming.

Its obvious pedro works or has worked in finance and understands these things. In my opinion the way he delivers will help the OP more then a nice breakdown of the reasons. Its tough and uncompromising just like the business world. And its often takes that harsh world to hammer home things to a confident entrepreneur. A few harsh words in a forum, when they are backed up with reality should be good lesson for the OP in that it will save him time and money, and probably for many users not commenting.

The Corinthian

Gloomtastic! wrote: »

as I tell my kids all the time, 'if you can't say anything nice, say nothing at all'.

LOL. The battle cry of the passive aggressive

Axwell

Deleted User wrote: »

A few harsh words in a forum, when they are backed up with reality should be good lesson for the OP in that it will save him time and money, and probably for many users not commenting.

Constructive criticism or pointing out to someone the reality of the situation in such a manner that it might open their eyes, save them time and money is fine. But there is a way to respond to people and get the same point across without turning it into a personal attack and giving someone abuse.

Axwell

Axwell wrote: »

Constructive criticism or pointing out to someone the reality of the situation in such a manner that it might open their eyes, save them time and money is fine. But there is a way to respond to people and get the same point across without turning it into a personal attack and giving someone abuse.

Well the former is pedrobeibar and the latter is his evil twin pedronomix I think and he probably should have resisted some of his temptations recently.

But personally I wouldn't fault the former with his posts. I think they are delivered well. A moderators nightmare maybe, but they have their place in an entrepreneurial forum amongst the different types of personalities around.

Axwell

Not a reference to either poster, simply how things should be done on boards. There is no place for personal attacks or abuse on any forum on here.

Axwell

Mod Note:

I decreased the font size in your post so my eyes dont bleed..and edited the post because its just a continuation of the nonsense I already posted there was enough of.

Let me make it clear - if the tit for tat nonsense continues you and anyone else involved will be getting a ban no questions asked.

Either the thread continues with some valuable contributions or it gets closed.

delahuntv

delahuntv wrote: »

As I (and neither you) don't have much information to go on, it is not my or your position to make judgement on someone or their idea.

My experience with the banks is as recent as 2 weeks ago and was told by the manager that the restrictions on lending have loosened considerably for retail. - So its from the horses mouth!

Yes but you understand the difference between funding a startup business with no collateral or cash, and providing a loan for a business expansion? You can't compare the two its apples and oranges.

delahuntv

I've decided to delete the posts - seems some posters can use bully style tactics, mis-read posts and blurt out total inaccuracies and responses to them are not permitted.

Funny, I used to look at this forum and always thought it was informative and very much a community and decided I'd post now and again.

But as others have rightly pointed out, there are posters on now that think they know everything and its their way or no way.

Again - North Korea comes to mind.

delahuntv

Deleted User wrote: »

Yes but you understand the difference between funding a startup business with no collateral or cash, and providing a loan for a business expansion? You can't compare the two its apples and oranges.

mod deleted the important part that said I stated quite clearly to get advice from a professional and draw up a business plan.

did everyone miss that part???

pedroeibar1

What have I started?:eek:

A few background comments on why I wrote what I did -
I really don’t care if the OP wastes his time writing a business plan. (I’ll assume it’s a ‘him’.) That is his right and none of my business. However, when he asks a question on raising finance and the content of the post clearly is ‘off’ it is reasonable to question it in any response. As I did

Really? You are 34, not a householder, you have no savings yet you say you have found banks to lend you 70k or 70% for start-up costs? Frankly I for one do not believe that.

The OP repeated his belief in the availability of finance, gave no cogent reason for it and added

Curtisin wrote: »

However, since you do not seem to believe that banks would be willing to invest in it, perhaps you'd be able to come up with alternative ideas on how to obtain this sort of cash?

I responded in Post 12 and gave the OP a detailed reply including several reasons as to why he would have problems. I also mentioned several other factors that needed to be addressed. I concluded by saying

pedroeibar1 wrote: »

Blunt, but in your circumstances anything else is just waffle.

If a poster who is starting out in business is so thin-skinned that he takes offense from this he has no place in business. (In fairness the OP did not, it was another couple of wafflers.) If my comments are incorrect, fine, criticize them, tell me where I am wrong. It is interesting that Bandara who jumped in here has yet to provide some advice to the OP on how to raise the cash. (And I did not report him for back seat modding).

The nightmare the Mods have to face is not me, or people like me, it is gobs#ites who post rubbish, inaccurate information and OT comments. Because that is what will kill the Forum. Unless of course the Mods just want to drive up traffic for adverts aimed at the imbeciles that are left, the better/more experienced posters having departed.

And FWIW, yes, as someone has surmised I early in my career worked as a commercial banker (forex, then corporate lending and M&A) before moving into industry and later self-employment.

pedroeibar1

delahuntv wrote: »

mod deleted the important part that said I stated quite clearly to get advice from a professional and draw up a business plan.

did everyone miss that part???

No, I saw it and let it go because I considered it to be worthless. There is no point in spending several hundred or thousands of euro on a professional to draw up a business plan that is doomed to failure because there is no start-up capital/ shareholder equity. If the OP was lucky and found an honest professional he would be told this at the outset.

And as others have said, your banking position/experience is totally different and irrevelant to this topic.

dbran

Yet another thread going nowhere and now degenerating into "I said and then you said" tit for tat rant.