THE OUTLOOK FOR 2007 IS BRIGHT In association with AIB

Adrian Moynihan, Business Startegist, AIB

2006 Was, by and large, another hugely successful year for the Irish business community in Ireland, writes Adrian Moynihan

The success of Irish businesses is clearly visible in the key economic indicators such as strong economic growth (est. GDP of 6% for 2006) and significant continued employment growth (est. 4.5% in 2006) with employment topping 2 million for the first time in the history of the nation.

Driving Growth

This performance and in particular the performance of the SME community as a driver for this growth has acted as a role model for would-be entrepreneurs. More people are thinking about starting their own business and considering how to develop sound business plans and commence trading. In fact, in 2006 over 20,000 new business enterprises were formed and commenced trading and the outlook for 2007 is broadly similar.

With regard to financing a business start up it is essential to establish firstly how much money is needed and secondly how and where to source it. Finance is a key issue that every prospective business owner is faced with when developing his or her business plans. So, what are the options open to you?

Financing Options

You: Generally speaking, the ‘cheapest’ source of money open to you when starting your own business is your own funds. In addition, financial institutions and other investors generally like to see business promoters investing their own money in their business as it shows a real commitment on your behalf to the business.

Private Individuals: One way to raise funds for a business is to receive finance from private individuals such as friends, family, business contacts, or venture capitalists, in exchange for a stake in the company, in other words, equity. This source of finance generally has no cost but does involve you spreading the ownership and possibly control across multiple parties.

State Support: There a numerous support agencies out there that may be of help to you when you are seeking finance to get you business started, such as Enterprise Ireland, or County and City Enterprise Boards. Make sure and assess the range of grants and supports these agencies offer if you are considering starting your own business. The recently announced changes to the Business Expansion and Seed Capital Schemes in particular will further help the funding of start-up businesses.

Business Banks: Banks that serve businesses and SME’s offer a wide range of short, medium and long-term finance products and services. In fact some banks will offer specifically tailored packages for start-up businesses, for example AIB recently announced a €100m loan fund for early stage companies for amounts up to €60,000. In addition, AIB will also pay for your first year’s membership of the Small Firms Association.

Access Capital

While sourcing the funding and getting the business up and running is often the number one priority for the business promoter, ensuring access to adequate working capital is equally as important. Cashflow is the lifeblood of any business no matter how big or small and the job of the business owner manager is to keep it flowing. Ultimately, it is what allows your business to open its doors and trade each day.