Starting your own business against the backdrop of Brexit might seem like a daunting prospect, but the country’s SME contingent continues to thrive. More than 99 per cent of the 5.5 million businesses in the UK are small or medium sized, while micro-businesses account for 32 per cent of employment and 19 per cent of turnover.
However, one problem you are likely to encounter is raising initial capital. You can’t always walk into the bank for a loan, while government grants are often difficult to secure.
This is forcing a number of aspiring entrepreneurs to explore other options, such as financial trading. Here’s how taking advantage of fluctuating exchange rates and a rising spot gold price can help you start your own business.
Securing start-up cash
First and foremost, it is important to establish that all trading involves risk and losses can exceed deposits. However, if you adopt a sensible and informed approach, positive financial gains are more than just a possibility.
When it comes to choosing a market, a lot depends on your investment personality, your limit for risk as well as short and long-term goals. Here are the main financial markets:
- Forex – Short for foreign exchange, this is the largest financial market in the world, where you trade one currency for another.
- Indices – Stock indexes such as the FTSE 100, which rises and falls depending on the share prices of listed companies.
- Shares – Essentially ‘owning’ a part of the company you buy shares in. You’ll also receive dividends.
- Commodities – The buying and selling of raw physical assets like gold, silver, oil, and sugar.
- Cryptocurrencies – Similar to forex, cryptocurrencies are virtual currencies which operate independently of banks and governments.
Seeing as all of these markets require a fair amount of industry knowledge, it is highly recommended to enlist the help of a financial advisor or dedicated trading company. That way, you will receive expert advice about which investments to make and in-depth analysis on how your trades are performing.
Additional advantages of trading
Along with securing start-up cash, trading can help your business in a number of other ways, especially if you enjoy significant growth and decide to go public.
- More capital – Public companies can raise money for growth more easily and at a better rate than private organisations of a similar size.
- More motivation – By offering your staff stock options and bonuses, they will be more motivated to work hard and less likely to leave.
- Greater liquidity – Readily available information about public companies can reduce uncertainty around performance. Investors are willing to pay a premium for liquidity.
- Better forecasting – The flotation process will give you an accurate overview of the business and how you intend to sustain success in the future.
- Enhanced image – Ongoing disclosures to the stock exchange or security commission and reports in the press can contribute to an enhanced brand image.
Even though most new businesses won’t even entertain the idea of going public, it highlights the positive financial benefits that trading can afford – from both ends of the spectrum.