Investor Ready can stop your struggle

Investor Ready is time verses money.

Investor Ready is about building a real business

Investor Ready is about getting your business into the ‘fair dinkum’ department. Real products and real management in place along with all the necessary facilities and equipment needed to make the business work well. Luck favours the prepared business and this does not happen overnight.  It will take many hours over many months. Of course, it will take longer if you don’t have access to expertise and your systems are not in place.  Let’s become Investor Ready and get lucky.

In making your business Investor Ready you are planning for investment, including your personal investment. Would you, or should you invest your own money in your business?  Most businesses need overhauling before they are ready for investment including more of your own money.  Isn’t it better to put things in order and up to date before, rather than after liquidation? Putting your organisation in a state of readiness, is another way of cleaning up the business to thrive, http://goo.gl/TqXnL3.

Just as you do, an investor wants to see that your business is a good investment. It needs to have a high chance of success and the potential returns are worth the risk. Before endeavouring to raise capital, it is important your business displays the characteristics of being Investor Ready to avoid disappointment.

What does ‘Investor Ready’ mean?

Investor Ready is a term generally been used and applied by investors when businesses are looking for capital. This can be a simple process or it can become very involved as a business becomes bigger. To be successful the process often requires impartial external assistance from a facilitator.

To most business owners their business is like their child. They are very passionate about it, even madly in love with it. They see the opportunity very clearly, and they see where money is needed to be spent. How this is seen to have a positive impact on growth and profit, is the questionable bit. They are totally convinced that they must go for it, but now they must convince the investors.

Unfortunately, they do it without properly addressing the needs of the investors. An unhappy and a frustrated business owner is often the result. Mind you there are good investors out there that understand entrepreneurs and the value they bring to a business. While they are rare they will help if they like you as a person and they like your opportunity.

Starting the process while you are small

This helps to ensure the safety of your capital by putting the business on a better footing. Being Investor Ready also makes it easier to borrow additional working capital or equipment finance. The earlier you start the easier and less expensive the process is and the quicker the benefits come to you. Once you have achieved Investor Ready status you will be pleasantly surprised. You will feel much better about the business and how much better the business will run.

When we apply Investor Ready thinking to smaller businesses, the state of readiness to move the business forward and make it safe for the investments of the owner and perhaps other family members and friends.

Why businesses struggle and how being Investor Ready can help

The main reason businesses continue to struggle is because there is always pressure to remain involved with business operations.  There is always a conflict between getting Investor Ready versus  ‘doing’. Conflicts can include cash flow pressure, sales pressure, people problems, answering the telephone and other operational activities. People are always busy, busy, with no commitment to putting things in order. They want to drive the business and attract the right investors, partners and other needed resources but are reluctant to do the work required.

I hear many business people say “that’s great, but I am too small to worry about it, anyway I don’t have the time”. Well, I guess that you don’t think like that or, you would not be reading this. Experience has taught us, without a business being Investor Ready, it will probably not be well managed on a day to day basis. And any business advice or help will have little chance of being implemented effectively.

Potential finance providers and partners, including you and your family, should be looking for the business to be Investor Ready. That is if they are expecting to make a successful investment. Investor Have your business in good shape and be able to sell yourselves as a business which can deliver. It assists you in raising the necessary capital needed for that to happen. There is no universal way of raising capital, but there are common principles involved and being Investor Ready, is an important one of them.

Investor Ready businesses make things happen because they have:

Approaching investors unprepared is probably the single most common reason why businesses and non-profits fail to attract capital and grants. Investors see 10 or 100 proposals a week. If your proposal does not include most or all of the following you have a problem, Chances are you won’t get past first base and the investor will immediately move on to the next proposal.

  • Business Model that works.
  • A working Business Plan and Budget in place, that works.
  • Up to date financial figures and reporting, you are financially savvy, http://goo.gl/0vynwy
  • Valuations of key assets which are reasonably current.
  • A mature management structure in place.
  • External advisors in place.
  • An owner’s Operations Manual, or Policies and Procedures in place.
  • Clear workflow systems and processes in place and working.
  • Market growth strategy.
  • Strong growth and/or growth potential.
  • The right attitude to new ideas and change, you understand possible disruptions, http://goo.gl/nkELO1 .
  • Intellectual Property is documented and protected.

Marshal your resources in such a way that they are working in unison. This makes it easier to be seen as communicated and well organised in the eyes of those who can support you.

Fine tune your proposals around being Investor Ready

Finding startup funding can be very difficult if you are not Investor Ready. Funding your business throughout a period of high growth can also be difficult.  Before approaching any investor first, consider the sources of funding available to you. By doing this you are able to do your homework and better tailor your proposal. There are many sources of funding that are available to business owners, the most common sources being:

  • Personal funds being injected into the business.
  • Friends and family.
  • Extending supplier terms.
  • Advance payments by some big potential customers
  • Bank funding, often secured by private assets.
  • Private equity funding.

Selecting an external private equity investor can be a great source of funds. They can bring with them expertise and important connections you may never know about. If private equity funding is something you are looking to pursue, being “investor ready” will be a really important step.

Quotable quotes

Rule No. 1: Never lose money. Rule No. 2: Never forget rule No.1”. Warren Buffett

“An investment in knowledge pays the best interest”. Benjamin Franklin

 

 

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