By Michael Cantwell, head of corporate finance at RMT Accountants & Business Advisors Ltd
Starting and growing a small business can be an exciting journey but it often requires significant new financial resources to bring your vision to life.
If you are looking to grow your business and think funding is the best option, it makes clear sense to seek advice from a professional where possible. Having a business advisor as a helping hand can help to smooth out or avoid any bumps in the road and streamline the process, saving you time and money.
They will be able to identify which options are best to consider and have the necessary contacts and expertise to move things along.
Whether you’re launching a new venture or looking to expand an existing one, securing the right type of funding can be a critical step in determining how you move forward.
Create a solid business strategy and business plan
No matter which funding route you choose, having a well-structured business plan is essential. A comprehensive plan not only showcases your business’s potential, but also demonstrates your understanding of your chosen industry.
Craft an engaging pitch that clearly explains your business concept, target markets, competitor analysis, USPs and growth potential, calling in the help of your professional advisors as required, and tailor your presentation to each funding source, highlighting what makes your business stand out and what’s next to come.
Assess your funding needs
Before diving into the world of potential funding options, it’s essential to determine how much capital you’re going to need and that you’re able to explain what you need it for. Accurate financial projections are vital for potential funders to assess the viability of your business.
You will need to outline the financials including expenses, revenue projections, and growth goals. You should use historic data and market research to create realistic forecasts for revenue, expenses, and profits. The more detail you can provide upfront, the better your advice and funding options should be.
Types of Funding
There’s no one-size-fits-all approach to funding and you might be surprised to learn just how many options are available.
These include, but are not limited to;
Traditional bank loans
Alternative lenders
Government grants and subsidies
Angel investors and venture capital
Crowdfunding
Business accelerators and incubators
Personal savings or friends and family
So, how do you choose?
Each funding source has its own application process with different instructions to follow and it is likely a lot of documents and information will be required. It’s important to stay organised as it can be difficult keep track of everything needed, especially if applying to multiple sources, and your professional advisors’ support here can be crucial in enabling you to do this successfully.
Be sure to highlight your business’s strengths and potential for growth. As mentioned earlier, the more information you can provide from the offset, the easier it should be to identify the best and most viable funding options for your business.
Prepare for funders to conduct due diligence on your business. They will examine and scrutinise your financials, operations and growth strategies to ensure their investment is secure and likely to grow. This can be an arduous and lengthy process, but a necessary one for all parties.
While securing funding is essential for your growing business, it’s also crucial to recognise and assess the risks involved. Taking on debt, or giving up equity, can impact your business’s future, so think carefully about the implications of each funding option.
What assistance is available?
RMT’s Corporate Finance team has helped countless businesses to achieve their growth goals. From the start of your journey, deciding which route to take, through to the end, ensuring you have everything in place and can continue to grow if you wish, they’re able to assist.
For more information, please contact Michael Cantwell on 0191 256 9500 or visit www.r-m-t.co.uk