How to raise finance for your business to fuel growth “T
HERE are common mistakes owners make when trying to raise finance and failing can put people off. But there are some really effective steps you can take to raise the finance your business needs to grow.” Stephen Drew, Professional Services Managing Partner at Smith & Williamson’s Birmingham office explains.
The West Midlands is one the UK’s most dynamic places to grow a business. In Greater Birmingham and Solihull alone there are 940 Scale up businesses turning over £11.6bn. The region is a force on the global stage and major component of the UK economy, generating £99 billion – that’s 5 per cent – of UK output.
Committed to the West Midlands, and delivering excellent client service, our Birmingham office is embarking on an ambitious growth phase in response to our growing client base.
Helping businesses successfully grow is at the heart of our agenda, and from our work we know that raising finance to fund growth and innovation is essential to fuel sustainable development.
Our Dream Bigger report recently studied the unique funding experiences of over 1,000 UK-wide companies. The headline is that 70 per cent of businesses in the UK that have attempted to raise capital have failed at least once and almost two in five have failed more than three times.
The report suggests that of the businesses that had successfully raised external finance, they were far more likely to have had a business plan ready and a suitable management team in place to execute it. To be investor-ready, a business must take a mirror to itself, asking the very difficult questions likely to be posed by a potential investor, rather than scrambling around trying to fix issues uncovered during the process.
40% of those who failed were unable to meet investors’ criteria. Don’t waste time and resources approaching the wrong type of investor.
Investors have their own strategy and investment criteria – no matter how good a business opportunity, if it’s the wrong fit, the investor won’t participate.
Funding needs to be properly targeted.
When founders were asked what advice they would give others, the overwhelming response was to do more research on the options and take your time before agreeing terms with an investor or lender.
This preparation should not be a solo endeavour. The most successful businesses recognise the need to call on experts who can work with you to find the most efficient route to finance, and ultimately, to sustainable growth.
Crucially, advisers can also help a business to have a clear understanding of its value – boosting the chances of getting the best possible deal.
Want to know more?
Visit www.smithandwilliamson. com to view the Dream Bigger: Hall of Fame which showcases the experiences and advice of some of the UK’s most inspirational entrepreneurs.
Smith & Williamson are hosting a programme of events in the West Midlands to support ambitious owners and the next event in our series will shine a light on the financing options available to growing businesses.
For more information, please email: Jasjeet.dhillon@ smithandwilliamson.com