If you are running a business and have plans for serious growth, then it’s likely you’re going to need some form of financial input along the way. Whether your strategy calls for a major cash injection for R&D, funds to move into new markets or increased working capital to sustain growth, there are many different ways of raising finance. This blog post is the last in our series of the 7 Deadly Sins of Raising Finance, written by guest blogger, Yvette Coles from Business West.
Sin 7: Not delivering a great pitch
In this game you only get one shot at the target; if you mess up in front of a lender or panel of investors, you’ll find it very hard to win them over at a later date. If your figures don’t add up, your business case is weak, or you fail to answer all their questions convincingly, you’ll have wasted everyone’s time and quite possibly blown your chances for good.
Prepare. And then some more.
There is no excuse for failing to get the basics right. Every lending or investment application needs to be based on a solid business case, clearly showing exactly what you need the money for; how much you need; and when will you be able to pay it back or deliver return on investment (ROI). For any lender, they key question is the serviceability of the loan. That is, how likely they think you are to pay it back. In the case of an investor, they will need to be convinced that your business proposition is strong enough to deliver the substantial rate of return that their risk model requires.
Take your time
Forget what you’ve seen on TV! In the real world, no serious lender or investor makes a decision after just a short presentation. Even for a simple meeting with the bank, you should give their business manager some idea of how much you’re going to be asking for and why.
For a more complex business case, or if you feel your true risk profile might take some explaining, consider giving them all the details, a report or even a précis of your presentation in advance.
Rehearse
If you’re going to deliver the goods on the day, you need to know exactly what is expected of you. If you’re new to raising finance then consider getting professional advice. At the very least, find out the exact format of the session that you’ll be attending…
Will it be an informal discussion? Do you need to be ready for a detailed Q&A session? Will your presentation alone be the basis for their decision – in which case, you better know exactly what needs to be included.
Either way, take every opportunity to practice and get feedback so you are ready to deliver your perfect pitch to achieve success!
This post was written by Yvette Coles, a Business West High Growth Coach specialising in raising finance for SMEs. http://www.businesswest.co.uk
You can follow Business West on Twitter @bw_businesswest
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