The economic environment is undeniably challenging. Yet for growth-oriented businesses, opportunities to thrive are still very much alive.
Determining the best way to secure investment can be the key to unlocking these opportunities. However, preparation is paramount.
What Investors Look For
Investors are scrutinising every detail in today’s challenging market. A strong management team, sound financial performance, and a well-thought-out growth plan are essential. These elements demonstrate to investors that a business has the potential for sustainable growth.
Developing a Robust Growth Plan
Whatever a business’s growth strategy, it must be underpinned by a detailed step-by-step plan, backed by solid evidence. Articulating the business’s USP and scaling strategy is crucial.
Management information and business data are vital. They prove the case for funding and help in refining the business and setting KPIs to drive growth.
The Importance of Strong Leadership
An investment is a relationship that hinges on people. Investors need confidence in the leadership team’s technical and professional skills.
A strong management team can inspire and lead, becoming the bedrock of success.
Ensuring the right people are in place to deliver the growth plan is non-negotiable for any aspiring business.
The Critical Role of Due Diligence
Due diligence can make or break the investment process. Financial accounts and supporting analyses must be detailed, compliant, and correctly formatted.
No investor will commit to a business with questionable financial records.
Gathering accurate insights on business performance allows for quick identification and resolution of potential issues before they escalate.
Harnessing Data for Success
Embedding systems and reporting tools can maximise profitability. They provide management with real-time financial data.
The best companies have robust data at their fingertips, helping drive business decisions.
Accurate data helps in swiftly addressing problems and seizing growth opportunities.
Ensuring Long-Term Business Viability
Businesses reliant on short-term trends may see initial success but often struggle as interest fades or markets become saturated.
Investors prefer businesses with concepts that have proven longevity and repeat customers.
Ensuring the business model attracts returning customers is critical to securing long-term investment.
Preparing for Multi-Site Expansion
Multi-site businesses require well-structured teams and decision-making processes to replicate success at scale.
Fit-for-purpose back-office systems are vital as the business expands beyond its initial market.
Investors want to see that new sites can recoup their set-up costs within two to three years.
Engaging the Right Investors
Not all investors are the same. Businesses should seek investors whose goals align with theirs. Some investors have sector-specific expertise, while others might focus on long-term returns. Aligning goals with the right investors is crucial for sustained growth.
Achieving investor-readiness is not instantaneous. It typically takes three to six months, or even up to a year in some cases.
However, with thorough preparation and strategic planning, businesses can position themselves to secure the necessary investment for their next growth phase.