“There are no secrets to success. It is the result of preparation, hard work and learning from failure.” - Colin Powell
Building and growing your business is a journey with many different stages. You may have reached the point where you need an injection of funds or capital and are perhaps considering outside investment. This can be a ‘game changer’ but you need to be ready!
There are two aspects to consider; being investment ready, which relates to the practical elements and information surrounding your business, and being investor ready which relates to your mindset in opening up your business to outside scrutiny. The latter can be a daunting prospect for people who have been running their own show for many years.
Potential investors will need to understand your business. This means having the fundamentals in place such as regular management accounts and the monitoring of Key Performance Indicators. Your business plan will need to be translated into a long term financial outlook and demonstrate a track record of performance or, at least tell a compelling story that will make sense to potential investors.
Do you have market research to underpin the assumptions in your business plan? Do you have a clear vision and understanding of what makes you unique? Know your why.
Do you have the right team and infrastructure in place to deliver on this plan effectively? Having an investable management team, or a plan as to how you are going to develop one, is critical to support any significant investment.
Define the opportunity
Truly understanding your business model is essential. Can you clearly and simply articulate the opportunity for business growth? Is it fit for growth?
Be clear on how much capital you need, what exactly you need it for and the impact it will have on your business. What growth will the additional investment drive, and how will you make the necessary returns?
Investor – Ready
“If you can’t explain it simply, you don’t understand it well enough.” – Albert Einstein
Understand the key points that investors might want to know about your business, and how to articulate them simply.
Perhaps your greatest challenge will be a change in mindset. Being open to outside involvement, support and guidance in decision making and future strategy. Talk to others who have been on the same journey and be prepared for lots of twists and turns.
Investor options – what to consider
How much control do you want to retain? A bank loan or grant will allow you to retain more control of your business. Through working with Angel Investors or Private Equity you will pass over an element of control in the business, however you may benefit from their expertise.
How much do you need? Funding opportunities will depend on how much you require and what it is for. Grant funding is available, often with very specific requirements attached which can limit applications. Some investors will have a minimum or maximum that they will invest. Consider crowdfunding platforms which can allow customers and supporters of your brand or company to invest.
People; who do you want to work with and remember you could be co-habiting for years. Fit is vital and works both ways.
‘A goal without a plan is just a wish’
Securing investment might enable you to realise your vision but growth without a clear plan and invested team will be limited. Be clear on the outcome you want to achieve but remain flexible in your approach and use your existing network of trusted advisors to help you work up a plan of action. Getting used to listening to the advice of others will be a good test for this particular stage of your growth journey!