Requesting external finance is a milestone for any company. It means your business has reached that level of maturity where it’s worth more investment, but it also means that someone will be scrutinising both your current business plan and your strategies for growth. It’s a bit like asking for a pay rise from a complete stranger.
So it’s not difficult to see why many business owners feel put off applying for finance. However, according to a recent report* many businesses may be underestimating their chances of success in obtaining finance, since the majority (around three-quarters) of those surveyed received the funding they needed following an application.
As with most things in life, you will feel most confident about coming under scrutiny if you have done all the preparation and research you can. The best way to convince others to trust you and your business vision is to give the right answers to every question. There are many different methods of raising finance, but potential lenders are all looking for the same reassurances:
- Exactly what do you want the money for?
- Does your product or service have proven appeal?
- Can you prove that demand exists within your target market?
- Do you have a realistic and sustainable cashflow forecast?
- What kind of return can the financier expect, and when can they expect to receive it?
Presenting this information in the form of a strong business plan will do much to inspire confidence in a potential financier. If you’re struggling to write a convincing proposition, resources exist that can help you, such as this useful template. Other resources may include local enterprise schemes, university programmes and bank services.
Why confidence and ambition are key to securing finances
Confidence must be genuine and not misplaced. True confidence comes from certainty and certainty comes from thorough preparation. If you believe in your business plan and can be certain that your numbers are correct, that assurance will be evident throughout the application process. Similarly, ambition will demonstrate your passion for the business, proving that you’re motivated to become a bigger and better customer for your investor. Confidence built upon realistic ambition is key to enabling both you and your lender to reap the rewards of investment.
Visit Matthew Jenning’s website to access more of his insights: www.thecareerbible.com/
* Commissioned by the Department for Business Innovation and Skills.
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