You’ve got the big idea and the numbers to prove your potential. Now you’re looking to take your business to the next level.
Growing your business is an exciting time, but when it comes to finding finance, enthusiasm won’t take you all the way. Preparation is key.
Having a clear picture of the road ahead helps you plan for any surprises that may arise along the way. It can help give you clarity when identifying the finance options that might be most suitable for you, and can provide you with confidence when looking to maximise your opportunities.
This article will take you on the journey from planning your growth strategy, to pitching to an investor. Here’s everything you need to know about scaling your business.
So you know you want to grow your business – but what are you trying to achieve?
First decide what success looks like to you, then map out how to reach your goals. What is your action plan for the next 12 months, three years and five years down the line? Once you have a clear vision, you’ll get closer to knowing where external finance could come in.
You may have got to this stage thanks to a large chunk of will, excitement and momentum, but now it’s time to breathe.
Spend some time identifying your business’ key needs. Do you understand your strengths and areas of development? Do you have clear goals in place and the ambition to hit them? A good foundation here will help you further down the line if you need to pitch to potential investors.
You have the plan and you’re ready to grow, but do you have the right financial capital to execute your strategy?
When you start to look for finance, it can feel overwhelming. It’s worth getting to know the range of options out there before deciding which one is right for you.
And it may be that your business could use multiple forms of finance, rather than just one, so there’s no harm in exploring– just be wary of over-leveraging your business as it may be off-putting for some investors further down the line.
Break down your search for finance into steps. One decision you’ll have to make is between equity and debt finance. At a very high level, equity involves selling shares to raise money, whereas debt involves borrowing money for funding.
Choosing between equity and debt depends on multiple factors, including your attitude to ownership and growth. If you’re happy to sell a share of ownership and your business is ready to significantly grow over the long-term, then equity might be better for you.
Get the full picture
- Learn how other UK businesses have used external finance with our success stories.
- Use our quick six-step tool to see the finance options which could work for you.
Once you’ve decided on a finance option that suits you and your business, you need to start looking for an investor or finance provider.
As tempting as it might be when money is on the table, it’s important to keep your options open and to look for a deal that suits you – whether that be the right type of debt or the right investor relationship.
Try and speak to peers or other contacts who have gone through the same process, so you can have a better idea of what might work best for you.
Whether you’re looking at equity or debt, then there are lots of ways to access potential funders or investors. One option could be to find an expert finance partner or a financial adviser. Their wealth of knowledge will help grow your reputation, whilst also providing a potential network of valuable contacts.
Don’t forget to make the most of your own professional network. Grow your contact list by attending industry events. You’ll quickly start to expand your pool of contacts, and a contact from your existing network can go a long way.
If you can’t get an introduction from your existing contacts, write a personal email or make a phone call yourself.
Securing the finance
Most businesses will be asked to present their business plans and ideas if they’re actively seeking investment or debt finance.
Think of it as an opportunity to find someone who believes in your business as much as you do. If you know what you’re looking for, an investor or lender can offer you much more than money.
You know your business better than anyone, so tell a story. Be honest and passionate: that way you’re more likely to find someone that you actually connect with. Remember that this partnership could last long into the future, so it needs to feel right.
Growing your business can be a long, hard journey. There are rarely any quick wins or challenges you can avoid. But if you’re prepared for the voyage and have a clear, well-thought through business plan, then the end result could be rewarding.