THE MANY AREAS OF BUSINESS FUNDING

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What is the best business funding for you will depend on your personal circumstances, your business circumstances and your approach to risk taking.

Although writing a business plan isn’t essential to secure funds, it is something I advise all my clients. At the very least it will give you clarity and enable you to focus on and achieve your business objectives.

So many of my clients have experienced that ‘chicken and egg’ situation, where we know we need to invest to grow but don’t have the time to generate the funds. This is where it makes sense to seek external finance. It could be that you’re a start-up and need extra administration, marketing or other support. Finance could make all the difference and enable you to generate more business and profits.

 

Here’s a breakdown of the funding available:

  1. Invoice discounting and factoring

Typically the financier gives you a percentage of the value of the invoice upfront, while you wait for payment. How much varies dependent upon the lender and industry sector.

  1. Invoice trading

Here lenders, unlike invoice discounting and factoring, allow you to select which invoices you use to take out finance.

  1. Venture capitalists

You’ll perhaps have some idea of how venture capitalists work, if you’ve watched BBC’s Dragons’ Den. Venture capitalists usually invest other people’s money, and look for a ten-fold increase in the business value over a three-year period. They don’t usually invest in start-ups because of the risk involved… unless they are confident about the product opportunity, market opportunity and management ability.

  1. Business Angels

These are wealthy individuals looking to invest in companies. I would recommend searching on line for ‘angel investment network’, a website which connects UK entrepreneurs with angel investors.

  1. Peer lending

Here you can pitch to multiple lenders via online platforms. You’ll need financial forecasts and a business plan – see my other blogs for guidance.

  1. Crowdfunding

This is similar to peer lending, but you’ll have to give investors part of your equity or provide ‘rewards’.

  1. Merchant cash advance

A loan that’s based on the income you receive from debit and credit card payments. It’s repaid via future card transactions as an added percentage.

  1. Short term cash loans

If your business is profitable you could get about 50% of your average monthly income, from your bank. The loan is repaid from the bank account.

  1. Trade finance

This loan helps bridge the gap between you paying your supplier for stock or materials and getting payment from your customer. The lender pays the supplier direct and recoups the funds when your customer pays.

  1. Equity release

You might be able to secure between 50% and 70% as a loan by the lender putting a charge on your property.

  1. Asset refinancing

You can raise funds by refinancing assets, such as vehicles and equipment, under new leases. This can generate large sums of cash quickly.

  1. Friends and family

Borrowing from people that you are close to, is not always a good option… unless they are millionaires! You wouldn’t want them to lose their money.

  1. Overdraft facilities

Bank overdrafts are an option if you’re profitable and have a good cash flow. Having an overdraft will cover you for an emergency or temporary blip.

  1. Bank loans

You’ll need to be prepared to offer a personal guarantee or assets. Banks are more likely to lend to companies that have been trading profitably for a few years. The Enterprise Finance Guarantee (EFG) is a government-backed scheme, which means some business owners can access bank loans, even if they’ve been turned down elsewhere.

  1. Business grants

Government bodies offer grants towards, for example, training, taking on staff, development and research. Search online for: ‘Government business finance support finder’.

  1. Soft loans

These low-interest loans are available through government bodies and charities. Search online for ‘start up loans’, ‘big issue investment’ and ‘prince’s trust’.

I hope this gives you a good overview of the funding available. Of course many start-up business owners use their savings, or credit cards, or remortgage their homes.

Please contact me if you’d like further help or see my other blogs and videos for loads of great free business advice.

WAYS TO GROW YOUR BUSINESS: PART 3

Grow Business 3

Here I’ll be looking at another 3 ways to grow your business. Topics I’ll cover are mergers and acquisitions, alliances, and franchising.

This is Part 3. See our website for Parts 1 and 2 and for other blogs helping you to succeed in business.

As a troubleshooter, advisor and business analyst, with many years’ experience of saving businesses, I’m going to share what I’ve learnt.

So …. How can you grow your business?

1.     Mergers and acquisitions

Sometimes you can grow your business through a merger or acquisition. You could buy a failing competitor, or one where the business owner is due to retire.

You may identify a business, which isn’t in direct competition, but offers products or services, which provide a natural fit.

Just ensure that you undertake due diligence, and know as much detail about the target business and its people.

All too often we hear of stories where business mergers or acquisitions go wrong, or are more costly than anticipated. This is because there is a gulf between what a business owner thought he or she was buying and what they did in fact buy.

2.     Alliances

This is a great way to gain access to a new prospect client base, and to grow your business. It can also be the first step towards a full merger or acquisition.

I like to think of it as a ‘getting to know you’ stage. You can test out the business and cultural fit before committing more finances and time, and limit the risk.

Of course, you will need to ensure that legal agreements are in place. For an alliance to be successful you also need to bring your people with you and ensure that staff in both companies are on board and committed.

You can also offer customers special preferential deals or similar benefits to help make the alliance work well for all parties.

3.     Franchising

Of course this isn’t for everyone. This is perfect for a business with a strong, recognisable brand, and a clear sales proposition. Products and services need to be consistent in quality, price, availability, and desirability.

You need a proven business model and agreed method of working. You need to be able to show that your business model works and will reap financial rewards.

Franchising requires excellent processes, strong robust systems and procedures.

In this series of 3 blogs, I’ve covered 9 ways to grow your business which cover clear communication, multiple sales streams and marketing channels, preparation for when times are tough, upselling, expansion, mergers and acquisitions, alliances, and franchising

Nozey Parkers are here to help you and your business thrive. Get in touch to find out how we can help you grow and achieve success for your business. Please call 0808 123 1399 or email enquiries@nozeyparkers.co.uk now to find out more about our support services and one to one advice.

Tina Marie Parker, business advisor, trouble-shooter and turnaround expert, has been helping businesses for nearly 30 years. From start-ups to succession planning. From companies going through rapid growth to companies desperate to see some growth. She helps them thrive and survive. Great business advice and hands-on support for your organisation, getting the desired results, fast

WAYS TO GROW YOUR BUSINESS: PART 2

 

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In this blog I will be looking at the next 3 ways to grow your business. Parts 1 and 3 on our website will cover another 6 ways.

So how do you make your business grow for long-term success.

1.    Prepare for tough times

However good our business idea, most of us will struggle at some point.

Ensure your business plan is up-to-date, this will help you gain loans and investment when you need it.

Don’t be one of the 25% of businesses, which have never had a business plan.

Please take notice of these important stats!

One third of all businesses with a business plan, are able to secure required funds.

Two-thirds of businesses with a business plan are able to grow their profits and SMEs with business plans will make 20% more profit.

Your funding sources could include ploughing your profits back into the business; bank or other loans; selling shares; and Government grants.

2.     Upselling

It makes much more sense to upsell to your current customers, rather than find new ones. Cost of acquisition is much lower and you already know the customer, what they require, and whether they are prompt payers!

Keep a database of clients, their names, contact details and personal notes such as Birthdays, their likes and dislikes etc.

Make sure, of course, that you comply with the Data Protection Act and don’t share details with third parties unless you have permission.

You can persuade customers to become repeat customers; you can win back old customers; and ask customers to recommend you to their friends, family and work connections.

3.     Expansion

Expanding your business relates to more staff, more premises or more distribution points.

Please ensure that you have given expansion careful consideration. Draw up a business plan to ensure expansion is the right development for your business, and makes financial sense now and into the future.

Is your business offering right, ready and primed for a global market?

Whichever way you choose to expand your business, you need to have an effective website presence. This means it has to work for the target market, it’s easy to use and to make contact including the all-important sales enquiry.

If you do want to attract a global market ensure your website is written for speakers of English as a second language, don’t use cultural references, and avoid words with more than one meaning.

Consider using professionals to create a website in the language used by the target customer base, and employing staff with the necessary linguistic skills.

Get in touch to find out how we can help you grow and achieve success for your business.

Nozey Parkers are here to help you and your business thrive. Please call 0808 1231399 or email enquiries@nozeyparkers.co.uk now to find out more about our support services and one to one advice.

Tina Marie Parker, business advisor, trouble-shooter and turnaround expert, has been helping businesses for nearly 30 years. From start-ups to succession planning. From companies going through rapid growth to companies desperate to see some growth. She helps them thrive and survive. Great business advice and hands-on support for your organisation, getting the desired results, fast

WAYS TO GROW YOUR BUSINESS: PART 1

Grow Business 1

Over the next 3 blogs I’ll be looking at 9 ways to grow your business. They cover clear communication, multiple sales streams and marketing channels, preparation for when times are tough, upselling, expansion, mergers and acquisitions, alliances, and franchising.

Part 1 and will cover just 3 of the ways you can grow your organisation.

When we set out in business we all have a dream of what we want. Some of us have a clear vision of how we want our business to grow. But it’s all too easy to get swamped in the everyday demands on our time and energy.

Get the foundations right then focus on the next step…

So how do you make your business grow for long-term success.

1.     Clear communication

There is more choice for customers than ever before. The Internet has revolutionised business and increasingly business is done online, but not only online … on a smart phone!

Express yourself. Ensure your Unique Selling Point is clearly communicated. Think about what you are communicating, to whom, how, when and why.

Spell out why customers should buy from you, and why you are different from your competition.

If customers don’t understand what you do and what you offer, they won’t buy from you.

Create compelling content for all your promotional activity, from your website and video blogs like these, to email, advertising, print and PR.

2.     Multiple sales streams

Starting out, it is quite common to have just one income stream. To grow, you need to make your business robust and that means looking for new ways to generate sales.

Think about what work you enjoy most, what you are best at, and what generates most income and profits as well as helping with the cash flow. As your business grows, you can employ others to do the bits you either don’t like doing or really suck at!

3.     Multiple marketing channels

It’s all too easy to feel overwhelmed when thinking about how best to market your business. None of us want to waste money.

Look at what others in your sector are doing. Find out what is working for them.

Understand who your customers are and how to engage with them. Track performance and measure your return on investment.

The choices are huge, ranging from print, advertising, leafleting, trade events, and PR,  to digital such as email and your website and also social media on LinkedIn, YouTube, Facebook and Twitter.

Google AdWords can be an excellent way to generate sales for a fixed budget and Google Analytics is just one of many free online tools to track engagement.

Dependent upon your business you could even have fun with experiential marketing .. it’s all about grabbing customers’ attention.

Networking is important, but can take a while to generate income. People need to meet, like, know and trust you first before they will refer business to you.

Here I’ve covered the first 3 ways to grow your business. You need clear communication, multiple sales streams and marketing channels.

Please check out Parts 2 & 3 of this blog, for more ways to grow your business.

Nozey Parkers are here to help you and your business thrive. Get in touch to find out how we can help you grow and achieve success for your business Please call 0808 123 1399 or email enquiries@nozeyparkers.co.uk now to find out more about our support services and one to one advice.

Tina Marie Parker, business advisor, trouble-shooter and turnaround expert, has been helping businesses for nearly 30 years. From start-ups to succession planning. From companies going through rapid growth to companies desperate to see some growth. She helps them thrive and survive. Great business advice and hands-on support for your organisation, getting the desired results, fast

9 WAYS TO GROW YOUR BUSINESS

Grow Business 1

When people set out in business they have a dream or vision of how they want their company to evolve and grow, but at start up, there are so many other things that need focus on to make sure they get the basic foundations right.

Once you have survived the early stages and have a got your business off the ground you will then be thinking about the next stage – growth.

Here are a few ideas to help:

1)      Have clear communication with your customers and potential customers of why they should buy from you.

Today you have so many competitors. The internet has made it so easy for customers to find someone that can fulfil their needs. If you aren’t communicating your message out there in the form of a self-explanatory website or compelling blogs or posts on socials media sites, another business is, and you will lose that sale. A big mistake to make is to not make your selling point unique enough and clear enough. If people can’t understand what you do, and what you are offering, they most certainly won’t buy from you!

2)      Have multiple sales streams.

When you first start out in business most people will have just one avenue of income. In order for your business to grow and be more robust you must look for new ways to generate sales. I.e. you might have started out as a wedding photographer, but you could quite easily do family celebrations, school events, provide photos to magazines, professional photos for corporates, etc. You get the picture (sorry…. couldn’t resist it)! It would also become clear, quite quickly, as to what area you enjoy most and are going to make the most money in, so you can then pick and choose as to what you want to focus on.  The other sales streams could be given to a new employee maybe as your business grows.

3)      Have multiple marketing channels.

There are so many marketing opportunities – advertising in papers, magazines, bulk mail outs, email marketing, networking, having a stand at an exhibition, telesales, referrals, etc. Not everything will work for your business, so before you spend out thousands on advertising talk to someone in your sector of industry to find out what they have tried and what works for them. Don’t just rely on one channel of marketing to bring in sales leads. Have a few that you focus on and monitor your ROI (return on investment) for each. If they aren’t working for you maybe try something new.

Networking however can take a while before you will notice any real benefit. It’s Meet, Like, Know, Trust. Depending on what area of business you are in, on average it can take 9 months of networking before people start to refer business to you or start to use your services themselves.

4)      Be prepared for tough times or needing extra funding

When times get tough or some extra cash is needed for investing in growing the business, if you are prepared with an up to date business plan, it will be so much simpler to approach investors and lending companies. From recent statistics:

A quarter of all small businesses have never had a business plan.

A third of the companies, with business plans, managed to obtain the funds they required.

Two thirds of business, with business plans, were able to grow their companies.

SMEs with business plans make 20% more profit.

Funding can come from:

Investing previous profits back into the business

Loans from banks or other financial institutions

Selling shares to outside investors

Government grants

5)      Up sell to existing customers.

Rather than trying to find new clients all the time, why not try upselling or introducing past clients, to some of your new products or services? For example, if we look at the scenario in point 2 where I talk about the different sales streams, if you have a wedding couple that you have photographed chances are they will be having children in the future, or already have children, and it may be that they may be interested in you photographing family parties, christenings, school events etc. Make sure you keep a database of your customer details and use these to market your company regularly. You can persuade one-off customers to become repeat customers. You can find old regular customers that have stopped buying and try to win them back.

Also, ask your customers to recommend you to their friends, family and work connections.

6)      Expansion

This could either relate to more premises, more staff or more distribution areas.

Opening at another location needs careful consideration. Choose a location that will suit you and what’s best for your business, not your wallet. You must do a whole new business plan for the new site to see if it is viable before proceeding.

How about exporting?  You need to look at what you do and prime your offering for the global market.

You need to be visible on the internet and your website needs to be attractive and keep people interested enough to read what you have to say.

7)      Look for companies that you could merge with or acquire.

Sometimes growth comes at the expense of a failing competitor that you could buy out. Sometimes it may be that you find another business that offers similar services/products to you, but are not in direct competition, and merging just makes perfect sense.

8)      Acquire customers through alliances.

Similar to the point above, if you can find someone that could be a possible merger partner, why not firstly ask if they would be willing to promote your business to their clients. You would obviously offer them the same in return. This suddenly gives you access to a list of prospective clients.

9)      Franchising.

Franchising is a great way to grow your business BUT you must be prepared and it is not right for everyone.

You need to have a recognised brand. You need a clear sales proposition that is easily communicated. Products and services need to be consistent in quality, price, availability, desirability. You must have a proven business model and agreed methods of working.  You must be able to show that the business model works financially.

Franchising needs organisational and streamlined process excellence. Strong, robust systems, processes and written down, well documented procedures are crucial.

If you would like any help with any of the above topics please contact me either by phone 07784 611399 or by email tina.parker@nozeyparkers.co.uk  or take a look around the website