I used my own savings to set up my first business, and as it expanded, was supported by small investments from friends and family.
I soon realised that it would be a mistake to give away what could be more shares than the capital warranted, and have learned to structure capital in a more considered manner so that share of equity reflects the contribution to the success of the company, rather than the finances required to establish it.
Sourcing capital For start-ups, private funding- from friends and families, even committed suppliers is the best bet for seed capital.
It usually comes on favourable terms and without fixed repayment timeframes.
It's important ensure that all parties are clear about what goes in, under what circumstances and when it needs to be returned, and some agreement should be written up to prepare for the possibility that this obligation cannot be met.
Attracting investment To appeal to investors, you need to plan well, demonstrate commitment and unique expertise in your industry.
Avoid the temptation to fudge the truth - investors want to work with honest, passionate and dedicated entrepreneurs and any hint otherwise can often be a deal breaker.
Prepare for both the best and worst case scenarios so that if a promised order falls through or a potential client breaks contract, you have an immediate Plan B to turn to.
That reduces the perception of risk and makes your business far more attractive.
Contact local support organisations and draw on your networks to maximize the support you have on standby - you never know when you will need to call it in.
Do your research and understand what you need and why and always bear in mind that investors are NOT there to pay your wages, but to support the establishment of hopefully new business that will hopefully generate future rewards.
Giving it away One of most common mistakes made by start-up entrepreneurs is giving away too much equity as this leads to in the primary stakeholders getting squeezed when further funding is required for future business growth.
Borrow if necessary but avoid giving away equity as you may regret it and have little to encourage future investors to finance the expansion of an established and successful business.
It's also essential to ensure that first group of investors understands the risk as well as the reward.
How much? Start-ups often don't ask for enough.
Obviously this makes you more attractive to initial investors and can be tempting when you are trying to offer them an easy decision.
However, it's harder to go back for more, especially if you need it to hit your original target simply because you didn't plan enough.
The capital to grow is a different matter that reflects a higher degree of risk and involves private investment rather than venture capital.
How many investors is too many? How many investors you work with is less relevant than the level of control they each have.
If you don't want them to have at least some say in your business, then, quite simply, don't borrow their money.
Keep the numbers down to between two and four.
Be clear about how decisions will be made before the investment and, again, be honest every step of the way.
If things are going well or badly, ensure you keep the investors informed but don't go running to them with horror stories every time something goes wrong (and it will).
They are backing you and the business and they have a right to expect you to put in the hard graft to succeed and protect their investment in you.
Where can I get further assistance? Government and some NGOs have really useful start-up schemes, many tailored to specific industries.
These provide everything from mentoring and training to affordable premises and finance support services.
Unfortunately for many SMEs, banks are simply not an option.
They are worth speaking to as they are pragmatic, business-focused and de-risked, so make a good sanity check that at the very least, will guide your business planning.