CNC Robotics: How we secured funding
Jason Barker ran a successful set-design business before founding CNC Robotics, a company that creates bespoke robotic systems, which in turn manufacture components, prototypes, and sculptures for a broad range of sectors. “We were borrowing a corner of an old warehouse in the docklands of Liverpool and we began entertaining the likes of McLaren and Airbus,” says Jason. “It wasn’t very conducive to the type of image a robotics company might want to portray. We couldn’t have blue-chip companies tripping over pots of paint as they arrived.”
Jason therefore decided to relocate to a 10,000 square-foot facility opposite Aintree Racecourse in Merseyside. “From then on it was very obvious that we needed to apply for funding,” he says. “We were looking at how to equip the new facility and move the business forward, which requires capital expenditure and cashflow. I needed £100k.”
Although eager for investment, Jason was reluctant to surrender equity in his business. “Equity is probably the first thing many entrepreneurs think of, but if you look at a brand-new business, which has a good idea but no real trading history, trying to place a value on that company is impossible,” he says. “I have always owned 100% of my companies and to relinquish that is also a pride thing I suppose.”
Funding for expansion
Having acquired £100,000 via the North West Fund for Loans Plus, CNC Robotics invested in the purchase of current robotic technology as well as capital equipment for demonstrations and R&D. “We are one of a small number of companies making and adapting robots to turn them into machines,” says Jason. “There is a preconceived idea that robots kill jobs, but that assumption is wrong in many ways. Robots are allowing companies to re-educate and re-skill people, not only creating more jobs but creating a better and safer working environment.”
Jason acknowledges that securing funding wasn’t quite as easy as it sounds, and that having a strong business plan in place was key. “Not everything hinges on a business plan, but a very strong one is important as far as financial institutions are concerned,” he says. “I am terrible at writing business plans and the first thing I learnt is to understand what I am not good at and try and delegate where possible. It is better to employ someone to write a cracking business plan than to waste personal time on muddling through and not achieving the funding you need because the business plan is poor.”
Jason would also advise companies seeking finance to do their sums carefully. “If the numbers don’t add up no-one will back you, whether angel investors, the bank or any other funding bodies,” he says. “You do need some personality and proof that you are worthy of funding, but that funding demands that you get your numbers right. It doesn’t matter how great your product is if the numbers don’t stack up.”
Such a practical outlook has served Jason well. CNC has grown almost tenfold over the last three years, and in 2013, the same year in which the company received funding, CNC was recognised as one of Britain’s top 250 fastest growing companies, the “vital 6%” of SMEs who have unlocked the secret to growth and are creating half of all new jobs in the UK economy.
Five key business lessons
- Avoid the equity trap – It’s difficult to know the true value of your business when you’re starting out. You need to be sure about what you have before agreeing to give it away.
- Consider government grants and investment funds – With so many of these on the market, it pays to work closely with your bank to identify the best solution for your needs and ambitions.
- The back-office should always be front-of-mind – Accounting and finances are the backbone of any company, but of prime importance when accessing funds.
- Don’t bank on a good personality – It doesn’t matter how likeable you are, a strong business plan is the first thing your financier will want to see.
- No one’s an expert in everything – From accounting to writing a business plan, delegate your crucial tasks to the right person.
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