Is your SME “investment ready”? Top tips to get funding

For entrepreneurs, having a brilliant idea is the beginning of their journey. Eventually, their startup will require funding once it has a product, a business plan, and a few customers.

For new and expanding businesses in the UK, attracting investors is essential. In addition to capital, the correct investors can offer industry contacts, knowledge, and guidance. But it can be challenging to navigate the world of investments.

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Discover how to locate and attract UK investors with this step-by-step guide.

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Is your SME “investment ready”?

Determining if your small to medium-sized business is “investment ready” requires a comprehensive analysis of several important factors.

A comprehensive and structured business plan that demonstrates your venture’s goals and strategic vision is essential to convincing potential investors of your firm’s potential.

Extensive market research and a profound comprehension of your target market and industry dynamics indicate your company’s strategic positioning.

Several factors influence your SME’s investment readiness, which include:

  • Financial transparency
  • A capable and strong team
  • Measurable accomplishments
  • Proactive risk management
  • Adherence to the law
  • Active participation in the investment community

Openness to criticism and readiness to modify your action plan in response to investor insights are other essential traits that demonstrate a dedication to ongoing development.

By evaluating these factors, you can be sure your SME is not just looking for money but well-positioned to work with investors in a profitable and mutually beneficial partnership that will promote long-term growth and resilience in a cutthroat industry.

Best strategies to get funding from investors

1. Create a business plan

A company plan can assist you in developing confidence with lenders, investors, and family members who can support your startup.

Describe your vision in your business plan. The possibility, target market, and industry you intend to influence should all be highlighted. It should also include:

  • Marketing plans
  • Timelines
  • Competitive analysis

2. Calculate your funding needs

Determine how much money you’ll need to reach your business objectives before contacting investors or submitting a loan application.

Are you looking for a small, one-time sum? A grant or business loan might be the best option. Do you require a more significant donation? A better choice might be angel investors.

Knowing your funding needs allows you to choose the best approach.

3. Tell a growth story

The number one priority investors look for is a growth strategy. A strong track record of performance indicates that a company can likely guarantee success over time.

Walking investors through the business track record is also essential. Ensures that the growth story highlights answers to questions such as: Has the business made a profit before? If not, do they have what it takes to deliver their plans?

Business size is only sometimes important; growth potential exists as long as the numbers rise.

Demonstrating that your finances are in order and that you’re prepared to grow is essential.

4. Understand your timescales

The time required to set up different types of financing can differ significantly. For example, banks or mainstream funding typically takes several weeks to finish, depending on the loan offered, but equity funding might take longer.

It’s critical to know your investor’s timelines in advance to ensure the process runs smoothly and meets your needs.

5. Determine what makes your business unique

What kind of return on investment do you offer investors? You must demonstrate your company’s value to potential investors, bankers, business finance companies, and even close friends and family. And doing so requires proving your worth in the industry.

You must understand your company more than anyone else does. Part of that involves evaluating your business strategies and comprehending your clients, but it also means finding out where you fit in the enormous marketplace.

Considering rivals and seeing where you rank is essential in determining what you’re doing differently (and better) than them.

Talking firmly about your business advantage will help set you apart in the eyes of potential investors. They are curious why they should put their money into you instead of another business. So, ensure that you are clear.

6. Seek the expertise of business advisors

During the planning stage, numerous SMEs seek the guidance of an advisor. Funding advisors offer plenty of knowledge, having previously collaborated with many SMEs.

They can evaluate an organisation’s unique requirements, assess the benefits and drawbacks of different funding sources, and present an alternate perspective that industry executives had not previously considered.

Using an expert can help an SME get the most out of the lending process and improve their chances of meeting good-fit investors. Because advisors can access established networks, they can direct SMEs to reliable and respectable funding sources.

Advisors specialising in alternative finance can also offer guidance on the distinctive features offered by various lenders, assisting company executives in evaluating these USPs in addition to more traditional metrics like cost, duration, and security.

7. Be open to feedback and adaptation

After receiving the funding, investors appreciate entrepreneurs who are open to positive feedback and are willing to adapt. Consider the feedback you receive from prospective investors to be valuable suggestions that will help you improve your business plan.

Be open to modifying your strategy according to their suggestions, demonstrating your dedication to continuous improvement. This adaptability instils trust with investors and positions your SME as solid and capable of navigating the constantly shifting business environment.

Hire a Small Business Accountant

Work with a UK-based accountant for tax, accounting, payroll, & EIS/ SEIS needs.

Have a question? Call us on
0203 900 3500
Monday to Friday 9am – 5pm

Final thoughts

Choosing the appropriate investment package is essential for any company seeking to expand. A well-structured investment should provide your company with the financial headroom it needs to grow, but if you make the wrong choice, your company may not be able to take full advantage of its market opportunities.

Finding investors in the UK, as with anywhere, needs determination, planning, and the ability to demonstrate value. Attracting investment becomes achievable with the correct strategy and an appealing offer, setting your company up for success.