How to attract investors for your business - what they really want!

Funding is one of the main issues faced by expanding businesses and should form part of any growth strategy. However, the bad publicity surrounding the banks’ supposed reluctance to lend may make it seem like securing funding is practically impossible, discouraging many businesses from even trying to move forward.



It certainly does appear that lenders are, understandably, being more cautious, but it is possible to gain financial support and there are many government initiatives (such as the Enterprise Finance Guarantee), grants and development loans, private investors and banks willing to give backing to attractive propositions. Recession or no recession, financiers are always looking for good opportunities: if your business is strong now then it’s worth investing into.



"So, what are investors looking for in my business?" This is one of the most common questions that businesses ask when looking to grow. The answer is that most are looking for evidence of the following:



Solid structure:



Committed business owners and a strong management team will inspire confidence. How long have your key employees been in place? What experience do they have and what stake have do they have in the company’s continued success? Company structure and staff loyalty are valuable assets as they underpin the stability of your business and promise continuity.



Formalised processes:

If an outsider spent a few days in your office, would they gain an understanding of how the company works? You may take them for granted, but there is value in formalising your procedures with reporting and control mechanisms to ensure consistent results and long term efficiency. Not only will potential investors be able to see how your business operates, but you will find it easier to analyse strengths and weaknesses in key areas and induct new staff far more quickly.



Market intelligence:

In most cases it’s unlikely that the potential investor will know your industry sector well, so you will need to provide relevant information and data that shows that you compare favourably against competitors. As well as giving your application more credibility, this information will allow the investor to understand what role their funds will play in the development of the business.



Accurate figures:

How well you know your company’s vital financial statistics can make or break a potential deal as it’s one of the quickest ways to gain credibility. Make sure you can recall headline figures relating to past performance, current status and forecast activity. You should also be able to demonstrate a history of monitoring this information, which is why it’s important to start now even if you don’t anticipate needing funding in the immediate future.



Key performance indicators:

Every business has a series of critical points that determine its success, or key performance indicators (KPIs). For example, the first KPI might be the initial point of contact with a potential customer: how is the contact handled? What impression does the customer receive and what system is in place to maintain contact? The next KPI might be related to presentation and how the premises, staff or web site appear to a potential customer. Each point is an opportunity to convert the lead into actual business and should be analysed to maximise effectiveness. Even the process of identifying the KPIs will have a positive impact as the areas ripe for innovation become apparent, and it shows an investor that you are a proactive, professional organisation.



Of course this is just a brief insight into a typical investor’s wish list, but hopefully it shows the strategic, process driven nature of the information they need and the planning and preparation that’s required. greater profitability.