How to create a successful business plan to raise finance?
Raising finance is all about marketing the business successfully. This is very different from marketing of products and services.
Marketing raises value of a product or service and in raising finance, value plays a key role. A good financial advisor will work through most of the issues but a business without value would still have gaping holes that are visible to the investor. This is where the business team & the interim or part-time Finance Director should take over as they have the best view of the business.
This is not to say that the business team can work by itself as there would be quality input from the financial advisor to be added to the presentation. Such information would generally be held by the advisor as intellectual property. Nevertheless it should be included in the presentation in order to make a due impression on the investor.
Financial advisors have a standard format of information available. The business team needs to tailor this information for their specific needs i.e. market analysis, financing, business research etc. Financial advisors help you to develop a business plan, methods of raising finance and structure a presentation for the investor.
The business team would have put together a draft plan without input from the financial advisor. If this is not the case, a presentation would have to be put in place for investors. It would be wise not to underestimate the time frame for creating a presentation. Depending on the scale of financing required, it would be several weeks or even months before all the necessary information has been received and included in the presentation.
The next step would be to focus on the financials, mainly a cash flow projection for the next 12 – 48 months depending on the scale of financing required.
Investors look for recurring revenue, revenue growth, margin expansion and cash flow. They are key elements to the valuation of client’s business and it will be known at the time of making an investment.
What are investors looking for ?
Investors are managers of risk. They are looking for companies that can grow and expand. They are looking for a great management team i.e. they are looking for a team of bright, experienced individuals, preferably not just an individual. If the client is a sole owner of the firm he/she should work on negating this weakness.
Some of the key ingredients of your presentation would be –
A sound investment strategy
Details of management experience
Realistic projections for cash and working capital requirements
Demonstrate growth in sales and profits
Provide key business ratios.
If you feel the business or business plan has all the above factors presented, then you should look at raising debt finance. If you would like to arrange a consultation on how your business plan can incorporate all the above factors in a well-presented business plan, visit us at Orbit Guardian Management Solutions Ltd.
If you need a business plan for a telecom, media or professional services venture (start-up or existing), contact us.
Orbit Guardian has experience in raising debt finance for small and medium businesses looking to grow to the next level.