1. I need an investment for my business idea; having already visited the bank, I was told that I was “not investor-ready”. What does that mean exactly?

‘Not investor-ready’ is saying that your plan needs work; there are gaps in your business plan. One of the most common areas where people fall down is ensuring that there is the right mix of skills in the business; it is not just a question of knowing your particular skill set. Lenders and/or investors look for both financial and marketing skills, a clear route to market, the size of the market, and your positioning within that chosen market. You do not need to employ people to cover any shortage of skills, but you do need to demonstrate you have access to the required skills – either in the form of mentoring, or via a more formal approach with the appointment of non-executive directorships. Further to this, you may need robust financial forecasts, an investor deck and an executive summary to showcase your business idea.

2. I am writing a business plan and struggle with the financial forecast. How can I predict how many sales I will make – and how much will I will to spend? At the end of the day, financial forecasting is useless, why do I need it? What is the best way to approach it?

There are a number of ways to approach this common issue… One way is to understand your cost base, and then work back to establish what sales are required to cover these costs, as well as providing a suitable profit margin. Once you have undertaken this exercise, it is very important to stress-test the forecast, to ensure that the sales targets are both realistic and achievable. There is little point in knowing that you need 1,000 units of sales to cover costs, if your market can only sustain 800 units.

3. Our manufacturing firm has 10 years of excellent trading history, and we are looking to expand by purchasing new premises, and adding to the fleet of plant. We cannot add to any debt within the business, due to the current level of personal guarantees on a credit facility that is currently in place. What options are open to us?

There are still a number of options available to you in this scenario; if the amount of funding required is significant, there are debt funds available that work on cash-flow – which do not require personal guarantees. In addition to this, equity funding could be available – which, again, would not require any personal guarantees. This would involve selling equity to the investor.

4. Our family has 10 businesses, 3 of which are franchises are local. All staff are family members. We currently spend in excess of £10,000 per month on professional fees (accountant, business coach, marketing and legal). Employing such people full time is even more expensive and risky. Are there any alternatives?

The business will always require a certain level of professional advice, which comes with fees. However, this cost can be significantly reduced by using Non-Executive Directors (NEDs) to advise you. NEDs have many years’ experience in advising companies in a range of disciplines, and could be a much more cost effective way of gaining the knowledge you require. In most cases, NEDs have many years hands-on experience working within SMEs and/or corporate businesses, and can provide valuable in-depth insights.5. I’m not looking for finance – so why would I need a business plan?

5. I’m not looking for finance – so why would I need a business plan?

A business plan is probably one of the most useful management tools, if used correctly. By detailing your business vision, it can (and does in most cases) highlight areas that you had not necessarily fully thought through. Thereafter, by applying a researched methodology into your market and competition, you can arrive at a realistic, achievable goal that can be measured. Simply saying that last month I made £5,000 does not actually say very much… However, if you planned to make £4,000, it has been a good month! Now you can ask the question…why? It may be that a marketing drive has been more successful than thought, but it could equally be that the cost base has changed, and due to that the business plan could tell you that you should have made £6,000! By analysing the actual results against your plan, you can easily determine if you are in control of your business or not.

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