Historically the UK has been, and continues to be, a hot bed of new business talent with a vast number of new businesses being set up each year, some succeed, some fail and some limp along.  However, one of the main problems which many new businesses experience is under funding.  There are a great number of business people who think that they need to cut down their starting budget to a minimum in order to be successful - this is not always the case.

In order for any business to have a chance of succeeding, the business needs to be fully funded.  True, there is always a need to cut out any surplus costs but there is no way a start up business will stand any chance of succeeding unless it is allowed to grow.  Many business people have been known to approach their banks for funding with a figure which is wholly inadequate and a recipe for disaster. You need to remember that no sensible bank would expect your business to break into profit from day one, a company needs to be nurtured like a young plant - given a firm base, encouraged to grow and watered frequently, with the end product of a blooming flower (or a successful business!).

To under fund your business from day one is a major mistake and drastically reduces your already borderline chances of success.   There are many banks who would not even consider the funding of a new business if they saw that the project was under funded.  Under funding leads to :-

· Less chance of being successful.

· Tighter trading conditions.

· Less breathing space to make the normal mistakes associated with a young business.

· A disheartened owner always fire fighting.

· Probably eventual closure

As strange as it may seem it is always advisable to ask for a little more than you expect when looking to fund a new business.  There are many highs and lows of setting up a new venture, but to experience the highs and the lows, you will need to be around - for that you need to be fully funded!