Business News

GUEST BLOG: How online trading can help startups

By Business & Finance
28 February 2017

By Zak Goldberg, law expert

With very few mainstream funding options to choose from, entrepreneurs are being forced to look at more innovative solutions.

Starting a business is never easy. There is much to think about, not least where you can source the capital needed to get your venture off the ground.

With nine out of ten small businesses going to the wall in the first year, times are tough. If a business doesn’t have sufficient cash reserves, it’s impossible for it to continue trading and an inadequate cash flow can cripple even successful businesses with a solid foundation; when the cashflow dries up for a start-up, it usually spells doom.

Entrepreneurs from deprived areas at a disadvantage
Recent research conducted by a crowdfunding platform found that 35% of UK entrepreneurs use their own savings to fund a startup and a further 15% rely on family and friends. For many, this lack of funding is a serious hindrance to starting a business.

In deprived communities where people don’t have access to savings or affluent families, the situation is even more precarious.

Entrepreneurs are now looking to alternative options. One such option worth considering is online trading.

Maximise startup capital
Entrepreneurs are usually willing to take a risk, which is why they step away from a secure job and risk their livelihood, home, and financial security to invest in a business idea.

Online trading can be a risky business, so it stands to reason that entrepreneurs have the right mindset to test their skills in the financial markets.

Online trading is one way to boost your working capital to ensure you have enough funds in the bank when you need them most

A savvy start-up owner can maximise their start-up capital by trading online. It’s possible for amateur investors to make significant amounts of money trading online.

Half of all traders are non-professional. It’s easy to learn the basics of online trading and you don’t need any previous experience to open a trading account online.

Practice online trading
What you do need is an appetite for risk and a willingness to think outside of the box. To begin with, it’s wise to open a demo account, so you can learn the ropes of online trading without risking your capital.

All reputable trading platforms offer demo accounts plus a host of useful resources, so it is sensible to educate yourself before you start trading. This gives you the opportunity to practice your online trading strategies and see how the markets work in real-time.

Online traders need to have a good grasp of market conditions and be good at analysing huge volumes of data

Online traders need to have a good grasp of market conditions and be good at analysing huge volumes of data. Tech entrepreneurs are well suited to online trading, but as long as you are comfortable with data crunching, you should have no problem making online trading work.

Make money to grow the business

Zak Goldberg

Zak Goldberg

Aside from boosting your start-up capital, trading online can also maximise your working capital and provide you with the means to grow your business into a successful venture.

Expanding businesses need regular injections of capital to help them expand. If you don’t have sufficient funds at a crucial time, your plans for expansion could be placed in jeopardy.

Online trading is one way to boost your working capital to ensure you have enough funds in the bank when you need them most. It is possible to make a large sum of money in a matter of hours, which negates the need to approach your bank with a request for an extra overdraft facility of an extended business loan.

Since most lenders take several days at a minimum before they make a lending decision, this doesn’t work for many start-ups.

Online trading is not a risk-free enterprise, but it can be a useful moneymaking strategy for startup owners who are willing to take a gamble on non-traditional finance options.

About the blogger

Zak Goldberg is a Law and Business Graduate from the University of Leeds who has chosen to follow his aspirations of becoming a full-time published writer, offering his expertise on all areas of law.