NEW START // ISSUE 6 // 17
FINDING FINANCE
THERE’S NO DENYING THAT TIMES ARE TOUGH. BANKS AND INVESTORS HAVE BECOME CAUTIOUS ABOUT WHICH BUSINESSES THEY SUPPORT AS MANY HAVE LOST MONEY IN WEAK INVESTMENTS THAT HAVE ALREADY FAILED. HOWEVER, WITH THE RIGHT IDEA, A STRONG BUSINESS PLAN AND GOOD MANAGEMENT, ENTREPRENEURS CAN PROVE THE VALUE OF THEIR BUSINESS AS A SOUND INVESTMENT.
GUY RIGBY, HEAD OF ENTREPRENEURS AT SMITH & WILLIAMSON, ONE OF THE UK’S LEADING INDEPENDENT PROFESSIONAL AND FINANCIAL SERVICES GROUP, GIVES HIS ADVICE ON HOW TO MAKE YOUR BUSINESS AN ATTRACTIVE INVESTMENT TO SECURE FUNDING.
GR: Having the right strategy is the first step. Good ideas are two a penny, but you need to ensure that they suit the market and that you have the right tools and management to succeed. You should have a clear idea of where you want the business to be in three to five years as well as identifying the critical success factors you need to achieve along the way.
‘RAISING FINANCE IS NOT EASY, SO YOU MAY NEED PROFESSIONAL HELP AND ADVICE. WHATEVER HAPPENS, DON’T LET YOUR ADVISERS WRITE THE PLAN’
A strong business plan is crucial. Try starting with the end in mind and work backwards - showing when and how loans will be repaid and how equity investors will achieve their returns. A good business plan will include your strategy as well as all the numbers to back it up.
Make sure that your projections are realistic and that your profit and loss, cash flow and balance sheet forecasts are fully reconciled. Your business plan is also the place to show that you have considered your market and your competition, as well as demonstrating the skills and capabilities of your team.
Investors and lenders will always look for a strong management team. While the business may be based on your idea, it is difficult for one person to manage all of the demands and challenges of a growing business. If you have a team of people with a range of knowledge and experience to support you, your business will have a better chance of success and will subsequently be more attractive
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