Are you interested in starting a small business in Melbourne, but don’t have the necessary funding to get past the concept and planning stage? The good news is that there are plenty of ways to obtain startup funds as the city looks to drive innovation and employment. Here are some of your main options.
State small business grant
The City of Melbourne periodically opens a round of applications to its program for small businesses to receive funding for their startup and growth. With clearly defined criteria and financing of up to $30,000, this can be one of the easiest routes to kickstart the funding for qualified businesses.
Among other things, though, you’ll need to make sure that your business is located within the municipality. Relocating means needing to find a reasonable commercial lease, and you may also want to start looking for house and land packages and a suitable location for your living arrangements. Doing a bit of research beforehand always helps when you’re tight on funds; at the moment, for instance, western Melbourne is more affordable than the Central Business District (CBD).
Perhaps the biggest potential source of immediate startup funding for your small business would be a venture capital (VC) firm. These firms aggregate resources from institutions, corporations, and individuals into a managed fund, which can lead to startup investment amounts upwards of $1 million.
The flip side, of course, is that VC funding can be the hardest to get. These funds are, after all, managed by experienced professional investors handling significant amounts of other people’s money. VC firms often have a predefined investment strategy and several analysts scouting for potential areas of interest. You can increase your exposure by presenting your business idea at conferences and other networking events, but you’ll still need a lot of luck and good timing to catch the attention of the right VC personnel.
While often confused with VC firms, angel investors are accredited individuals of high net worth who are willing to make a personal investment. Since they are using their own money to invest, the amounts will be smaller than with VCs, but angel investors are more likely to be drawn to startups in their fields of interest or expertise. You’ll also be dealing more or less directly with a fellow entrepreneur, so personality, persuasiveness, and building good relationships can matter more.
Business incubators in Melbourne can provide a method of guiding startups smoothly along the development process. There’s typically a timeframe for involvement, ensuring that you have access to resources besides funding, such as workshops and other skill training, networking opportunities, and mentorship. Different groups target varying sectors and strategies, so you’ll have to look for one where your business concept fits best.
From online campaigns through Kickstarter and other platforms, crowdfunding has evolved to offer equity as a legal option for startups. With the new legislation providing more protection for investors, it’s more important than ever to have a good plan for your budget, equity structure and shareholder’s agreement. Your success in this area still depends largely on consumers’ collective interest to provide the initial investment, but your ability to raise the public profile of your campaign can help as well.
There are other ways to raise funds so you can launch your business in Melbourne, but these tend to be the most common and sought-after in today’s small business scene. Hopefully, with some luck and effort, you’ll find the option that leads to the best growth for your business in the city.