It’s not easy to second guess exactly why someone wants to invest in your company but you can usually take more than a fair stab at guessing – they love your product/service, they think you’ll be great at the helm or they are convinced there is a gap in the market for your proposition etc. There are a few reasons that come up time and time again though and here’s what they are.
The Enterprise Finance Guarantee scheme (EFG) brought in by the government in 2008 was deemed as a perfect opportunity for small business owners to secure a bank loan, even if they didn’t have the security for regular loans. However, many small businesses and entrepreneurs have found themselves with serious problems due to the scheme being misrepresented by the banks. Vince Cable last week warned the banks to make sure the Business Innovation and Skills processes were being followed and the EFG principles made clear to potential borrowers.
When I started Coffee Nation I thought I had found an idea that was good to run with – simple to operate takeaway coffee dispensers installed in newsagents and convenience stores across the UK. A similar offer already existed in the US and what works there usually comes here. Also, coffee shops were just starting to appear in the UK so I thought the signs were positive.
Every day we make decisions – hundreds, if not thousands, of them, such as what jacket to wear or what to have for lunch. When it comes to the big crunch decisions though – the ones that will have a major impact on our business – it’s often not such a simple matter. It’s easy to sweat over a decision too much to the extent you just can’t see the wood for the trees any more.
Lonely leaders of small business are often advised that a Non-Executive Director can help accelerate their growth and give them support they need, perhaps as a sounding board, a person to sense check developments with or just someone to share some the strains of the business. However, all too often I see inexperienced company leaders in a fast growth phase take on an ill-fitting, expensive and sometimes out-of-date deadwood individual who will drag out their black book, carefully manage the value they introduce to the business over a longer period of time than is necessary, and aim to milk their tenure for a term well beyond their sell by date.
Keeping it in the family is generally the preferred choice for most businesses. However, some find that cash constraints or growth opportunities make it either necessary or desirable to raise additional finance. If this cannot be found through borrowing or other non-equity sources, then raising external equity may be the only option.
It is easy to think that raising finance for your business will be hard when banks are not lending, people seem to have less money to invest and the economy gets worse.
However, nothing could be further from the truth. There are very generous tax breaks for people who invest in businesses like yours; there is more money out there for investing than ever before; and there is a completely new type of investor waiting to invest in you.
You do need to be looking in the right places to get it, though.
Last year banks were in the news for all the wrong reasons. According to reports the state owned banking giant, RBS, had been making vast profits at the expense of vulnerable SMEs; its effort to reduce risky loans has nudged previously solvent companies out of business.
The winners of the first ever Great British Entrepreneur Awards — in association with Bizcrowd – were announced last night at the Grand Connaught Rooms. The Awards have been recognised as the new benchmark for entrepreneurial success in the UK. Last night’s event reflected their appeal with attendance from a who’s who in UK business, politics and entrepreneurship.
Have you ever left a negotiation feeling like you gave away too much? Or perhaps you didn’t get everything you wanted? Successful negotiating is a key skill for SMEs — especially when they may be dealing with much bigger businesses. Whether establishing the salary for a new recruit or getting the best from a supplier, these tried and tested negotiation tactics can help you get what’s best for your business.
Finding it hard to place stories with the media? Then try this
Many PR professionals are complaining that it is getting harder to place stories with the media, journalists are either too busy or simply get too many pitches. But there is a way of turning that to your advantage, which I’ll address shortly.