A number of small businesses stay small because they don't have the financial power to grow. This article offers a few tips about how to get focused on your next stage of growth.
HAVE A PLAN
The first thing is to create a good business plan. Even if you don't have one, it is worth spending some time writing down where you want to go in the next few years. Imagine that you are in a meeting with a potential investor. How would you explain to them what you do, and how you are going to expand it?
My tip is to include three elements to your thinking: informational, numerical and graphic.
YOUR BUSINESS INFORMATION
Firstly, make it easy for potential investors to know the what, why, where, when, how and who of your business. This essential information should be honest and transparent, and attractively worded.
WHAT - Write down in clearly articulated, good grammar, exactly what it is you do, and for whom.
WHY - Write down something of your motivation... how were you founded; what drives you; why is there a need for what you do?
WHERE - Write down your geographical and virtual reach. Where are your customers? How many are there, both target and actual?
WHEN - Write down a timeline, year by year, of your history and future. Let the investor place you in time.
HOW - Write down your process, in clear terms. What do you give the customer, and how does the process work?
WHO - Write down a brief biography of you and your core team; include skills, qualifications, personality, interests, experience.
Any investor will want an idea of your profit and performance so far, plus a good idea of how you project this into the future. They will be looking to see that you understand your own path to growth. In particular, they want to have confidence that the future, as you describe it, is likely to happen. This reduces their risk.
On a spreadsheet program such as Microsoft Excel, develop the numbers of your plan, year by year. Make sure it is well structured so as to show clearly how the profit you will make relates to numbers of customers and numbers of sales. Make your assumptions clear. If necessary, involve an accountant to make sure that you are thinking and formatting clearly.
Try to gather a set of graphics which illustrate your business, for you, your market, and investors. It could be a logo, a set of photos of your business in action, a set of product photos, or a series of thematic pictures which give a flavour of the atmosphere you try to create. Build up a library of such things, and if possible make your office, your online presence, and anything customers or investors see, consistent with this library. Notice your own style, and focus it, so that it is clearly expressed in everything you do.
Draft a document (it doesn't have to be anywhere near perfect at first) outlining the above. Have one section marked INFORMATION, another marked FINANCIALS, and another marked GALLERY. Don't be a perfectionist... at first, just write something under each of the headings. Then see what you have, and develop it on a weekly basis. Perhaps you could set aside the same time each week to develop your business plan.
It is amazing how putting your ideas on paper makes you think. You will learn certain phrases that you can then repeat to investors. In particular, you will learn, concisely and expressively, to tell others what it is you do, and why it has such a good future. You will also learn to test your own ideas. If something doesn't sound logical at the planning stage, then you can revise your thoughts before investors get to hear of it.
So that's the exercise: draft yourself a business plan, clearly expressing your business's information, its financials, and its visual 'house style'.
In order to grow your business, you may need investment. In preparation for this, get together a document showing clearly your business's key information, its financial history and prospects, and its overall feel and style.
Don't try to make it perfect first time round. Perhaps revisit your plan weekly, until it is something you know makes sense, and that you can feel proud of. Then you will be ready to convince investors to join you in your well-articulated quest.
Eddie Chauncy MA ACA is a Chartered Accountant, trained counsellor, and writer. He provides business training and assistance internationally through The Finance Academy Ltd, and locally in Surrey through Slyfield Business Services. Contact Eddie using the details below for help and assistance. First consultation is free. He can help with business plans.
Eddie can be contacted as follows:
mobile: 07765 892691