Email marketing: Are you getting these type of results in your business?
August 2, 2010An innovation on an old format – any good?
August 5, 2010Whilst banks are posting a return to profits, lending to small businesses is falling. According to this article:
According to the Bank of England’s most recent Trends in Lending report, overall lending to businesses contracted by £2.3bn in May – more than double the £1.1bn slide seen in April.
Lending to private firms was down 4.4% year-on-year in June, the Bank’s figures say, in contrast with the pre-credit crunch era when it was growing at an annual rate of almost 20%.
The British Bankers’ Association (BBA) attributes the trend to falling demand, as companies retrench and reduce debts, But the Federation of Small Businesses (FSB) claims firms are afraid to approach banks.
Whether right or wrong this seems to be the new reality.
However, we can spend our time complaining about what we cannot have or who will not help us or we can try something different. I believe that this presents us with an opportunity to relook our businesses and think of different ways of bringing our ideas to reality.
Bootstrapping
One of those may be bootstrapping, which involves looking at your business challenges differently and finding new ways of moving forward or getting your project off the ground by, for example, slimming it down, asking for help from your customers and suppliers or changing the way you are organised as a team.
Seth Godin is a great advocate of this approach as are the guys across at 37signals and they have both written an ebook and book respectively on this subject to help you think your way through this approach.
Crowdfunding
Once you are done bootstrapping your new project or future growth, you may find that you still need finance. Another way to source funding could be crowdfunding. Crowdfunding is a form of Crowdsourcing, applied to finance. Instead of seeking finance from institutional sources, the supporting community is asked to support the project in a distributed fashion.
Sounds like a great idea and it is actually working in practice. Have you heard about KickStarter? It’s crowdfunding in action. They focus on helping creative projects raise funds from interested investors. The creators of the project retain 100% ownership and they also stipulate the reward the funder will get if the project successfully raises enough funds. This can be financial or some other reward. Here’s a news story: Cash-strapped entrepreneurs get creative from the BBC that explains a bit more about it.
This idea has been around for a while and my friend, John Crickett across at BusinessOpportunitiesandIdeas.com wrote about this back in 2008. In his article he wrote about a number of projects that operate along this type of model. One of which is Myfootballclub which was set up by a friend of mine and his brother in 2007. They gathered thousands of football supporters who all contributed £50 and they went onto buy Ebbsfleet United who currently play in the Blue Square Premier football league.
Whilst I agree that raising finance can seem essential, expensive and challenging if you cannot get it. So be it. The world, your business and your passion shouldn’t end there.
The lesson from all of this is simple: Different approaches do work they just take a bit of vision and a lot of work to make happen.
Dreams do come true.
Thanks to James Cridland for the image.