One of the scariest moments of starting a business is when you invest money into it. Whether it’s your own or anyone else’s, you are putting value on an idea you’ve had and finding out if it can be successful.
This, however, doesn’t have to be scary – the very fact that you are starting a business is a positive thing and there is support out there to help you through it. Remember, every successful food business in the world started with an idea and someone’s own money!
You can start a street food business on barely any money, especially if you’ve been working in the industry for a while. You can use your connections and you might find that more established traders are happy to lend you equipment for your first day, which will help you get any profits reinvested back into your business.
On the flipside, you can also end up spending a lot of money, especially if you’re unsure about your idea and figuring it out on the fly whilst trading. This can be very costly – we know of traders who have spent over £30,000 on a food business that only lasted a year because their idea wasn’t fully formed.
Generally the most common method, if you’ve been working for a while and saving cash each month to eventually build some savings then you can use this as the jumping off point. £5000 is a realistic amount to start with.
Another very common method of starting is borrowing money from people who have more of it than you and then promising to pay them back. You could offer a little bit of interest but, generally, if they like you they would be happy just seeing your business start and getting free food.
This method was really popular a few years ago but has fallen slightly out of favour. Examples of crowdfunding are: Good & Proper Tea, and STAKEhaus. Why did it fall out of favour? It’s actually a massive pain to organise and there are easier ways of getting investment.
Government start up loans are like ex-Arsenal midfielder Aaron Ramsey; totally under-appreciated.
They are available for people who haven’t started their own business before and you can get up to £25,000 for each member of the business.
The interest is pretty low as well. If you wanted to borrow £10,000 to start your business and then planned to pay that back over 2 years, it only costs you £636.95. There are other suppliers of start up loans, like Virgin Start Up, and other organisations such as the Princes Trust offer grants.
Square Root started with a small start up loan and they’ve grown their business off the back of it.
KERB’s very own Theo-Lee Houston started Teala, a business selling iced and hot tea on the streets. Starting in Greenwich market for just a few hundred quid, he went on to join KERB and be the main tea trader at KERB’s first Alchemy festival behind Royal Festival Hall on the Southbank.
Theo pulled in favours, reused what he could, got talking to other traders and borrowed what he could here and there. Over time, Theo started to get more events and got some money.