The animation sector in Scotland is recognised worldwide for the quality of its work. But it’s never been the specific focus of efforts to support development or growth — until now.
Creative Scotland recently carried out the first comprehensive review of the sector, looking at education, training, individual and company production, business development and animation events. The idea was to paint the most complete picture possible of the way the sector works, and to make suggestions for future development.
Ideally, your exceptional work will generate enough money to run your business, cover your expenses and fund new developments. But sometimes you might also benefit from a little financial help.
There are several ways to finance your business activity and projects and it’s important you understand the different options available.
The most common types are:
- Personal investment
- Bank Finance
- Private Investment (Business Angels)
- Personal Investment
Most businesses are started with personal investment including potentially funds from friends and family. This could be in the form of equipment brought into the business; unpaid time and cash from private sources. These should be noted for tax purposes as well as showing banks and other potential funders what you have already invested in the business.
Banks usually offer financial assistance in the shape of an overdraft, credit card or loan.
In coming to a decision, banks perform a risk assessment of your business and your ability to repay. So it’s important you understand your own financial accounts, forecasting and analysis well enough to discuss it with a bank manager. A bank manager will more likely support your business when they understand your business and finances as well as you. This is one of the good reasons you should speak to banks sooner rather than later when seeking bank finance. In addition, it gives you time to understand what information the bank needs and to have time to revise plans if needs be. See the full guide for further information.
If you are a new(ish) business, It is also worth checking out Startup Loans which is a government backed scheme with a lower interest rate than high street banks.
These are hands on certified investors who give their own capital to your business in exchange for equity, so if you want complete control of your business, this isn’t the option for you. Often joining the board, they will offer their wealth of experience in advice and assistance, but remember, they have invested their own money so will expect a return on their investment (e.g after 3/5/7 years).
With investing being high risk, once again it is important to prepare a well planned and researched business and marketing plan to convince them that the risk is worth it, the potential to make money is high and that you stand out from your competitors.
You can use crowdfunding to raise a large pot of money from lots of little investments or advance sales. Marketing is key to raising money for raising finance this way because, as the name suggests, you need a crowd to make it viable. It’s best suited to projects with a strong, clear message and wide appeal. It also helps if you have an existing audience or fan-base to tap into. Cultural Enterprise Office has Industry Associates who specialise in Crowdfunding so contact for a meeting if this route appeals to you.
Financing Your Business
Overview of Finance for the creative industries
Looking for sound advice and/or a sounding board?
Contact us to organise a meeting with one of our experienced and friendly creative industry advisors.