Here are my seven tips to help you raise finance for your business.
Many non finance experts are wondering how they can lay hands on cash to start or expand a business. I think it is fair to say the information available in the market is less than clear. For that reason, I am going to quickly share with you my seven tips to help you raise finance. I am confident you will find this information invaluable.
1. Be clear about the amount of finance you are looking for. There is nothing worst than being ambivalent about how much you need when faced with a potential investor or lender.
2. Be clear about what you want the money for. No wise investor or lender will hand over their cash when you are not sure what you want the money for. It is always advisable you have a clear breakdown of how you expect to use the money, with clear estimates of costs of resources you plan to purchase. It might be that your cost estimate may change with time, as inflation is outside the control of your business. Be ready to amend your estimates in your business plan if it changes before you meet with a potential investor.
3. You need a business plan and you need one that is robust with financial forecasts included in the form of profit and loss, balance sheet and cashflow. Your financial forecast should have key financial indicators which accountants call ratio analysis. I have seen business plans that only consist of financial figures. This is not a business plan it is merely a financial plan. Do not make the same mistake. Your business plan must provide details about your business, your vision, mission and strategic objectives. It must also provide details about your target market, marketing and sales strategy. You want to ensure the plan is compelling and by compelling I mean really persuasive and influential. My company help clients put together compelling business plan.
4. You certainly want to be able to explain your business plan to potential lenders and investors confidently. If you can’t do this, you will rapidly lose their trust. Lenders and investors want to know you have a team of experts in the business, that will support the delivery of the plan (this does not mean they are your staff) but equally if you own the business, they expect that you should be able to explain you business plan to them with confidence. You may call upon the professional accountant as many do to explain the figures at formal meetings.
However, as the owner of the business, if you can explain the figures, you will even grasp their attention very quickly. Presenting to investors and lenders is all about influencing other people to do what you want them to do. Don’t forget this salient point. Do all you can to influence lenders or investors to part with their money by taking the necessary steps to be well informed about every aspects of your business plan. Stay clear from cheap plans that will ultimately lack in quality and don’t achieve your goals. Whether you are in business or starting a business, there are some expenses you will have to incur and if you fail to do so, your business dies. Sorry I am being blatantly honest with you as I want you to succeed.
5. Make sure that you present yourself well, when you meet with investors and lenders. The way you dress and speak matters. Every step of the way you are being observed. Your presentation must be compelling. This is why we provide training seminars in financing your business to help you develop the right knowledge base so that you give yourself the added advantage when you are faced with potential investors and lenders.
6. Finally, think correctly and positively. Your mental life is one you have to take control over. One of the secret of success is the ability to take control of your mind and direct it to what you want to see happen in your life. If you want to raise finance, you can’t be talking about defeat and doubting your ability to do so successfully. I covered this aspect of “Mind Power” in my book “My Business Is My Business- Learn How to Earn a Fortune” and I have produced audio CDs on the subject of the power of the mind. You may want to grab a copy and learn more about this. Remember, you have something to offer the investor or lenders.
Investors and lenders of money make their money through your ideas. They sell money for interest or dividend to those with great ideas that will generate profits. So the relationship is two ways. All you have to demonstrate is that your deal will help them realise their dreams. They have to see it clearly and so it is up to you to show them how it will work. Stay clear from fuzzy language and terminology that will only serve to distract from raising finance when faced with the opportunity to do so. Do not use jargons familiar in your industry but not outside your industry.
7. Finally, solicit the support of experts. You do not want to be “Jack of all trade and master of none”. Remember, the money you pay for our services is not an expense, it is an investment in your business. Change your perception of money. This is one of the causes of success. Successful people always pay for good advice. The opposite is equally true for people who repeatedly fail in business and life generally.