Corporate Magazine - 2013, June (PDF) - Invest Northern Ireland

26 May June 2013 InvestinHow to...How to...This time our new step by step advice pagelooks at how to go about raising finance.Your business may needfinance to help fund thedevelopment of newproducts, to facilitate entryinto new markets, expandbusiness premises, purchasenew equipment, recruit newstaff, or fund working capitalrequirements. Accessingfinance however, can betough, especially these days.The following approachmight help to increase yourchance of success.Know how much funding youneed and what you need it forSurprisingly, many funding enquiries failbecause applications do not effectivelycommunicate how much money is beingsought. Identifying the finance needed topurchase new equipment may be fairlyeasy, but the working capital financeneeded to achieve a 15 per cent growthin turnover will be much more complex tounderstand and communicate.Prepare a detailedbusiness planPreparing a detailed business plan isrecommended for all businesses, not justas a means of raising external finance,but as a tool to help manage and monitorthe performance of the business goingforward. Regrettably, many companiesallocate too little time, and place too littleemphasis on preparing a good businessplan. In the context of the more challengingfunding environment, a business plan– with detailed financial projections andcashflows – has become more importantthan ever. A good plan will certainlyenhance the prospects of obtaining thirdparty finance; in the absence of a goodplan the prospects are remote.Use technical expertise froma good adviser if in-houseskills are not availableAlthough there is additional costinvolved, a good adviser can offervaluable assistance, particularly forthose businesses less familiar with thefundraising process or those lacking thein-house technical expertise. Not only cana good adviser assist with the businessplan and the financial projections, but theywill be familiar with the funding optionsavailable and will be able to provide adviceon finance structures and solutions thatbest fit the needs of individual businessesand their management teams. By offeringan effective challenge, a good advisercan also sense check management’sassumptions and help provide confidencewith the technical elements of the plan,leaving management to communicatetheir passion for the business, and theirstrategy to take the business forward.Look to develop a strategicpartnership with yourfunding partnersIt is important to think in terms ofdeveloping a strong business relationshipwith funding partners to ensure that a lackof finance does not inhibit growth. Thismeans developing open communication,and in the case of management/businessowners, ensuring that you understandwhat your funding partner needs. Whilstthe objectives of equity funder and debtproviders are often very different, allfunders are increasingly likely to wantregular trading information that helpsto evaluate performance against plan;typically this will consist of monthly/quarterly management accounts andpotentially KPI analysis.Invest NIAccess to FinanceInvest NI has developed a number ofnew finance solutions to help local smalland medium sized companies seekingfinance. Currently there are four fundsavailable, two offering equity finance andtwo offering loans.We have also introduced a schemeto help businesses develop fundingproposals. The Finance Voucher isavailable to export focused growthcompanies, reimbursing up to a maximumof £4,000 of external professional costsincurred in developing a funding proposal.For more information visit:www.boostingbusinessni.com/jobs/access-to-finance/