Growing a business from the first seed of an idea is not a smooth linear journey and it\u2019s not as simple as going from A to B. The destination is seldom decided as the business idea takes form, becomes a reality and then grows into a successful enterprise. The finance journey is continuous; there may never be an arrival point.<\/p>\n
For any business to travel on a journey it needs at all points of that journey to be appropriately financed. Businesses need to make sure there is the finance to back their growth plans. Businesses are often started on overdrafts or credit cards, or with help from friends or family or by using the family property as collateral. But soon after that the business will need to be financed so it can stand on its own two feet if it is to be a sustainably growing proposition.<\/p>\n
This guide will be invaluable for entrepreneurs who are starting a business, directors who are running growing businesses and established companies \u2013 of all sizes \u2013 as well as for business advisers and investors.<\/p>\n
It explains how to approach the financing decision, the questions to ask and how to treat it as a business process, so that it is not as daunting as it can sometimes seem. And if it does get daunting, good advisers can provide further guidance. This guide also provides details of where to obtain free advice on raising finance.<\/p>\n
Once a business is up and running on the growth journey, management will need to ensure that future plans for growth can be financed. If not, there is a chance the business will fail. The table on page 09 shows the options available to, and the decisions faced by, business-owners along that journey.<\/p>\n
On the growth journey there will undoubtedly be ups and downs. Through the life of a business, as soon as plans are made, be they looking for growth or for survival or to batten down the hatches, the finance must be in place to support those plans.<\/p>\n
The work to be done in getting a business to a position where it can take on additional capital need not be too daunting a task; however, nor should it be underestimated. START by looking at the business afresh, with a questioning mind, so that the answers to the questions a potential shareholder or lender will probably raise are immediately to hand.<\/p>\n
Business plan Preparing a solid business plan is the key to securing funding. A robust business plan helps potential lenders or investors understand the vision and goals of the business. It also brings focus to management\u2019s understanding of the business strategy. It helps them understand the risks inherent in the strategy and the impact of any deviations from their plan \u2013 particularly when it comes to funding. Information will depend on the target audience, but it should incorporate:<\/p>\n
Before looking for external capital, businesses should make sure they are managing cash effectively. Some fairly simple steps can help maximise available cash<\/a>. Being able to demonstrate good cash management also sends out the right signals to potential investors or lenders. The only way cash flow can be kept under control is by understanding the ins and outs. A weekly cash-flow forecast is often essential, particularly in a growing business.<\/p>\nThe journey<\/h3>\n