05_-_Small_Business_without_Debt

Raising finance takes a long time on your side since

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Unformatted text preview: sumptions for example, their views on interest rates. Raising finance takes a long time - on your side since you want to have a choice and the ability to negotiate the best deal and on their side because they want to get to know you. It is always wise to maintain contact with potential financiers as well as your existing financiers. If your business is rejected by a venture capitalist you should stay in touch in order to build the relationship and trust that will help you succeed next time. The funding decision is not one to be taken on poor information or with insufficient time. 12 Sources of Venture Capital under £250,000 There are seven general points to remember about raising finance: DO consider your objectives for the business honestly. DO look carefully at the strengths and weaknesses of the management team. DO consider how you might increase the business' resources, such as asking customers for payments in advance. DO match the type of funding to the needs of the business. DO present an enthusiastic plan but be realistic in your figures. DO allow yourself enough time to negotiate properly and fix the deal. but.... DON'T be misled into thinking that growth is the only route - a period of consolidation may be essential for the success of the business. You should include the following sections in your business plan: Executive Summary The business - history - current status Products - description - regulatory requirements - research and development Production process - techniques - location - suppliers - capacity Sales and marketing - market size - competition - sales analysis by product and customer - marketing techniques Management and organisation - management team with full CVs - organisation chart - remuneration policies Financial information - historical results - profit and cashflow projections - sensitivity - financing requirement The future - future prospects - exit routes for the investor Glossary Accountants' report: A report prepared by a registered auditor on a company's historical financial information for publication in a prospectus or similar investment advertisement. APR: The annual percentage rate is a rate of interest that every financier must quote and must calculate in the same way, so that meaningful comparisons can be made. Authorised person: A firm authorised under the Financial Services and Markets Act to carry on investment business. Base rate: The rate of interest which forms the basis for the charges for bank loans and overdrafts or deposit rates for commercial banks. Rates of interest charged by the banks on much of their lending to customers are set at margins over their own base rate: the size of the margin depends on the nature and status of the customer. A change in the base rate normally signifies a marked change in the level of short-term market interest rates hence the base rate is widely used as an indicator of the broad level of interest rates. Board memorandum: A minute (and supporting papers if appropriate) adopted by the board of directors supporting forecasts, projections, working capital statem...
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