You don’t need me to tell you it’s tough out there. If you’re a small business owner you’ll already know that, whilst even if you’re not, you’ll have been told it a million times already by the assorted media outlets. Heck, just look at the boarded up shops down the high street.
To this backdrop, it can prove even harder to get the funding required to fund your businesses growth. However, there are ways to get the growth that you yearn. Here a few tips that might help you on your way…
Construct a comprehensive business plan
To get an idea of what they’re investing into and most importantly, what they could get in return, potential investors will want to see a detailed business plan. At its most basic level, this will consist of four different sections; a description of the business, an outline of the existing market details and information on the business’s operational and financial details.
Take your time constructing the plan and ensure that you’ve covered every last facet of the business, endeavouring to make your financial projections realistic. The three most important measures investors will be interested in are the profit and loss statement, the cash flow forecast and your projected balance sheet.
An intelligent, insightful and realistic business plan, should help you to engage investors.
Explore every last avenue
The banks are endemically cautious following their atrocious decisions over the last decade or so and getting funding from them, no matter how good your business plan, can prove akin to getting blood from a stone.
If you’re struggling to get funding from the banks, don’t give up hope though. Consider strategic partnerships, explore government help schemes and look at going down the equity financing route, divulging a bit of control to a venture capitalist in exchange for investment. Even consider turning to friends or family…although admittedly you may rather not mix your business and family life. For obvious reasons.
What I’m getting at is that there are alternatives to the banks, despite what some might say.
Maintain a healthy credit score
It’s always important to maintain a healthy credit score but when you’re going through expansion, some good numbers here can really do you a lot of good.
A healthy credit score can help you to achieve low interest rates on any loans that you successfully secure. To help you get a health looking score, be savvy with your budget and do not extend credit terms to customers, unless you are confident they can pay your invoices on time.
Still Struggling to get finance? Consider bootstrapping
If the banks won’t lend and you’ve exhausted every other avenue of funding, don’t give up hope just yet.
It’s not suitable for every business out there, as you’ll need either a constant and early revenue stream or considerable personal finances, but if you tick those boxes and you’re struggling to get your hands on capital, bootstrapping may offer an answer. You’ll have to keep an extremely keen eye on your finances and be unrepentantly frugal, but, going it alone can be possible. Regardless of what some of the naysayers may say.