Personal Conviction. cjz8na3fyp This is about psyching yourself up for success. You must spend time thinking yourself into the role you are going to play in order to convince others to lend you money. You can write the best business plan ever but at some stage your personality is what’s going to be assessed, even if it’s just a ten minute meeting. If backers don’t feel you “mean business” with your proposed business, they’ll be unlikely to invest with you. Personal conviction imbues you with an indefinable energy, a feeling of “Yes!” Yes makes all the difference.
The Business Plan. This crucial document is the equivalent of a politician’s manifesto. Though unlike a political speech, your audience has to buy every word! Your business plan is your mission statement. It must also show potential backers precisely how and when the profits will be generated. Vague estimates will impress no-one – the business plan requires no-nonsense facts and figures – as well as the essential “wow factor”
Practice the Presentation. However brief your presentation to investors it has to be comprehensive, fluent and well put over. Indeed the less time you’ve got to sell your idea, the better your pitch must be. Role-play the whole thing several times with a friend or your partner, and get them to think up questions and objections. This way you can fine-tune both the content and delivery of what you’re going to say to the money people.
Ask the Family. Conventional wisdom states that business and friendship don’t mix and that borrowing start-up money from relatives and mates is a recipe for disaster. This can certainly happen if those concerned have unrealistic expectations. By all means look to friends and family if they genuinely want to invest in your business. But always ensure the business plan and proper contracts are drawn up just as with a bank loan.
Ask Your Customers. If you already have a business and want to expand or start something new, maybe some of your existing clients would be interested. You will not be a stranger from nowhere asking them for cash – you already have a commercial relationship.
Ask Teachers. Contact universities and colleges who have entrepreneurial centres offering start-up finance and support to new businesses. Keep your eye on publications like the Times Higher Educational Supplement and the Guardian weekly Education section for news of these kinds of scheme.
Ask about Micro-Loans. If you want a relatively small injection of capital but your credit record is inadequate, it can still be difficult to borrow. Micro-Loans focus on your character and management ability rather than anonymous credit scores. Micro-Loans are available from certain banks, government agencies and business groups. They can serve as a springboard to larger financing and help establish your track record.
Ask the Government. There are various departments, national and regional, designed to give a leg-up to new businesses. Often you’ll be asked to jump through various hoops (made of lots of red tape!) before the leg-up arrives. This puts some people off, and they go to the bank for a simpler, quicker, and more expensive, loan. But if you’ve the patience to tick the boxes and fill in the endless forms that government borrowing requires, you could get a better deal, even an interest-free loan or grant.
Ask the Angels. Traditionally these are the wealthy individuals who put money into show-business ventures, especially West-End musicals. Often it is a gamble and the Angels lost their shirts but get to rub shoulders with the stars. In whatever type of business the Angels will ask for a share of your profits (equity) and if offered cash for equity you must consider the terms carefully before signing. On the other hand Angels really can make your company fly.
Location, Location. If you’re prepared to set up shop, or factory or other business in an area deemed in need of enterprise, there can be some generous grants available to start-ups. The usual criterion is that you will provide employment, preferably to locals. Contacts who may advise you of current opportunities include the Department of Trade and Industry, the Small Business Service and your local Business Link.