August 26 2016.

When you start a business, unless you are the beneficiary of a trust fund or you are a serial entrepreneur with serious past successes, you will invariably be needing funding. These days, it seems you don’t need to inject a lot of capital into your start-up. You can even start from your bedroom, spending a couple of thousand or so on a website and some stock, and off you go, you’re an online trader.

But how much money do you actually need? For a start, you will need roughly six months worth of fixed costs on hand as a start-up, as a conservative estimate. You should have a plan to cover your expenses in the first month. Don’t underestimate those expenses; they can rise as a business grows, and companies that fail invariably run out of cash.

For those borrowing from family, friends and fools, that £2,000 well can quickly run dry. The bootstrapping route is well and good, but it is more than likely that you will need some funds beyond what you can supply yourself and through your nearest and dearest.

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