Financing business growth

This month, we thought it would be good to share some advice on financing business growth ahead of our upcoming event Get Set, Get Investor-Ready and Go with Luke Desmond on March 13th.

Understanding whether you need investment and what kind is vital for small businesses and Luke is a wealth of information on the topic.

You want to grow and need an injection of cash to do so, but this is where the certainty ends. How do you decide where to get this money from and when you should ask for it?

Presuming you have already exhausted your own personal funds, you are left with two main choices. Equity vs Debt.

Equity financing means you are looking for an investor to give you money in exchange for a portion of your business (equity). This is what they do on Dragons Den, and the equity is the bit they negotiate on! Debt financing means borrowing money that needs to be repaid, usually with interest.

There is a third option - Grants. Grants usually don’t need to be repaid but will often have conditions around how they are spent. You don’t need to give up any equity to get these, either but they can be hard to come by.

Find out more about the pros and cons of each in this article from Luke.

SEIS

As an entrepreneur you should also make sure you are aware of the?Seed Enterprise Investment Scheme?(SEIS). The idea of this scheme is to help smaller businesses raise funds and grow. When people invest in an SEIS-qualifying company they can get very good tax breaks.?

As a business, you are likely to apply for SEIS because it is so attractive to investors, given the tax savings they get making these investments but it’s important that you understand at least the basics of what these savings are and how they work. There are some criteria you will need to meet.

If you are seeking money from people who are new to the investment world, then you will find that they ask you for help understanding how the scheme works.

To make sure you know the ins and outs of the scheme check out this article.

Are you a good investment?

There is a lot to think about to decide if your business is worthwhile investing in. It isn't just about your financial position, but your overall business model, the team you have in place and the market itself. The price and potential returns need to be right as well, but for some investors it is also about the timing or what they can bring to the table.

The key to being an attractive investment proposition is to be fully prepared! Securing Investment is a huge topic, but this article is a good introduction to Investment and how to prepare for this journey.

The other side of the coin is worthwhile understanding so discover what makes a good investment as well.

If you'd like to find out more about this vital element of business then join us on March 13th from 5-7pm. Luke's event last year was very well received and we are looking forward to more brilliant advice this time around. The event is free to attend and includes light refreshments. Save Your Spot