BLOG: What does “being investment ready” mean and look like?
Ian Meyer, Business Growth Advisor, Benchmark Business Development Limited
Did you know that, historically, four out of five businesses that are seeking investment don’t get it? It’s a shocking statistic.
So, what is the problem – there has always been investment money out there, so why do only 20% get the investment?
What does being investment ready mean then?
This is all about how to de-risk matters…both for you, your business and the investor. You’re making the case that means the investor can’t say no.
Fundamentally, investors are investing in people, not products, services or solutions. How confident can you make them feel that you will make a success of the growth plan and you just need that investment to take you to the next level, which means they get their return?
Five things to consider and think about to secure the money?
- Strategy: where are you trying to get to, why and how do you plan to get there? You may have short, medium and long term strategies but you need to start at the end point, just like going on a car journey. Is your strategy clear and can you articulate it well?
- Sales: I am including marketing under this section too, as the two are inextricably linked. So, who is your market, why are they your market and what research have you done to support this, what is your sales plan and how are you going to market to them, what are your key messages (Not USP’s, but Buying Benefits), how realistic are your forecasts, what are your routes to market? How well can you articulate this and convince your investor?
- People and Skills: How strong is your management team...really? What gaps exist eg: do you need to recruit an Operations Director, Finance Director, Sales Director, Non- Executive Director to help you deliver and execute on your plans? Are there other skill gaps that require filling as you start to scale up your business? How do you find the right people and make sure that they want to work for you as well? How well have you thought this through and what’s your realistic plan?
- Systems and Processes: Without investing in robust systems, you run the risk of your growth suddenly collapsing like a pack of cards. How will you cope with a 50% up turn in sales and customers, for example? Customer service is so important and technology is driving all of our expectations higher and higher – we expect a response immediately, we expect delivery within X hours in some cases, we expect first class service all of the time. The perception of your business is critical, so invest in great systems and processes and keep on top of them.
- Finance: How well do you understand your numbers, your margins, your P&L? What is the investment going to be used for exactly and how will that benefit your business growth? Investors want to know that you know your stuff – we have all seen shocking examples on Dragon’s Den haven’t we?!
There is a lot to consider when seeking investment, but by following the steps above you will be confident in your own growth plans and how you will execute on them, as well as making is easier for the investor to say ‘YES’!