Financing a Business

I recently watched Al Gore’s documentary, An Inconvenient Truth, and found it compelling viewing. It is an excellent production and helped shine a powerful spotlight on climate change, the challenges we face and some steps we can take to reduce the effects we are causing[1]. It painted a very bleak picture for the future of […]

After a business plan has been written, the next stage often involves pitching the plan to prospective investors. This very fact means that the plan authors and management team should be one and the same and that ‘outsourcing’ the business plan writing process should not be considered. It is not just the content of the […]

Those familiar with the BBC2 show Dragons’ Den will be all too aware of the following scene. The entrepreneur is tasked with presenting his business plan to a panel of investors (i.e., the Dragons). The business plan pitch is going well, and then one of the dragons asks the simplest of questions,
”What was your turnover […]

Most businesses need financing. Cash flow is different than profits, so profits don’t guarantee money in the bank. There’s financing needed to manage starting costs, stock waiting to get paid, and other factors. Much of that is what we lump together as “working capital.”
Most people think of financing as debt, borrowed money. In this […]

We do have some tips and suggestions. You probably know all of this already, but here are some refresher tips:

Polish your business plan. Reread the executive summary, management team, competitive edge, and financials. If you’re operating in Internet space, in the present market, make sure you are generating traffic and focusing on the ability of […]

Venture Capital
You probably know who you are because you’ve been there already. Venture capital firms want repeat entrepreneurs. They want plans with huge growth rates, in high-growth industries — usually high-tech as well as high-growth. They want excellent management teams with proven track records. And they want plans needing multiple millions of pounds. They […]

The Break-even Analysis lets you determine what you need to sell, monthly or annually, to cover your costs of doing business—your break-even point. Illustration 1 shows the Break-even Analysis table from Business Plan Pro Version 11.0.
Illustration 1: Break-even analysis

The Break-even Analysis table calculates a break-even point based on fixed costs, variable costs per unit of […]

You should probably focus your search on so-called “angel” investors, not loans, and not the mainstream venture capitalists. Angel investors are a wide range of different investors, not as formally established as venture capitalist firms, and not as homogenous a group either. An angel investor might be a successful business person, a wealthy individual, a […]

Finish your business plan. You need a plan for, at least, two obvious reasons:

to help you estimate how much money you need;
and to communicate with your banker.

Call your bank. You probably already have a business banker or relationship manager, you have security, and the plan. Talk to your banker. Ask about terms, conditions, and requirements. […]

If I could make only one point with budding entrepreneurs, it would be that you should know what money you need, and understand that it is at risk. Don’t bet money you can’t afford to lose. Know how much you are betting.
I’ll always remember a talk I had with a man who had spent 15 […]