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Raising capital to get your tutoring agency off the ground can be tricky. Unless you already have savings put aside for your venture, you'll need to look elsewhere for financial assistance. TutorCruncher have compiled a useful list of options that can help you get started as an agency in the private tuition industry.
Small Business Grants
One of the most popular choices employed by start-ups, small business grants are fairly difficult to come by although they do provide a great source of income for those who are fortunate enough to get one. If you're one of the lucky tuition centres that manage to successfully apply for a grant, then you'll be up and running in no time as grants don't need to be paid back. With more people setting up their own businesses in the UK than ever before, new grant schemes are launching all the time so keep your ears to the ground for potential opportunities.
For those unable to secure a business grant, applying for a business loan can also be an excellent way to finance your tutoring agency. Despite business loans being more difficult to obtain than in previous years, this is still a viable option for many new start-ups as you benefit from retaining equity in your business. At the moment, the government is looking to increase the availability of business loans through initiatives such as Start-up Loans. It's worth doing some research before committing to a business loan however, as inability to repay can result in significant debt.
Invoice factoring is a means of freeing up cash until your customers pay their outstanding invoices. A popular financing option for businesses that need to maintain regular cash flow, invoice factoring can provide a lifeline to new tutoring agencies. An invoice factoring company will take responsibility for securing payments from students or parents, which also takes the stress out of chasing unpaid invoices. In other words, you don't have to wait until your customers pay you in order to grow your business.
Do you believe in the kindness of strangers? If so, then going down the crowdfunding route could be the answer to financing your tuition agency. A way of raising finance by asking people to make small donations, crowdfunding can quickly provide you with the capital you need. Normally, businesses seeking funds set up a profile on websites such as Go Fund Me and then spread the word about their crowdfunding project through a variety of different methods. Friends and family are always a good starting point for donations.
We've all heard of Dragon's Den right? Well that's the idea behind angel investors. As a business, you can try pitching to entrepreneurs or other types of investor to help secure funding for your agency. It's worth bearing in mind that this approach normally means giving up part of your business equity in return for an investor's contribution. However, if you have a solid business plan, this can be a rewarding way of raising finances. For more advice on how to find angel investors, there's a great article on the Entrepreneur.com website that we highly recommend.
Finance a tutoring agency, TutorCruncher
Which of these methods will you use to fund your tutoring agency? Perhaps you've already established your business? How did you raise the finances needed to get your agency off the ground? We'd love to hear from you.