05_-_Small_Business_without_Debt

Bgatewaycom prepared a business plan that presents

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Unformatted text preview: nd – (Business Gateway) Tel: 0845 609 66 11 www.bgateway.com prepared a business plan that presents the key facts to the financier in a clear and concise fashion. Northern Ireland – (Invest Northern Ireland) Tel: 0800 027 0639 www.investni.com Local Enterprise Agencies And Trusts Help for small businesses are available from Local Enterprise Agencies and Trusts throughout the UK. This normally consists of advice and counselling but some agencies and trusts also manage venture capital funds. Preparing The Business Plan Every business needs to plan where it is going, whether it is raising funds or not - and the business plan is a method of formalising this. Where it wants to go will be a combination of the objectives of the owners and the business. As an owner you should ask: Local Authorities What do you want out of the business? Many local authorities offer help and advice to businesses in their area. When do you want to realise your wealth? Accountants What are your strengths and weaknesses? Firms of accountants provide financial advice to their clients on a commercial basis. In many cases this includes advice on venture capital. Choose an accountant with several years' experience in this field - from small start-ups, to management buy-outs, prospectus issue and fund raising and public flotation. Solicitors Firms of solicitors, particularly those on the "Lawyers for your Business Scheme" which is run through the Law Society, will offer business, as well as legal advice. Banks The retail and large clearing banks provide a full range of financial services and advice on a commercial basis to existing and potential customers. Banks advisory services include guidance about appropriate sources and forms of finance and, in many cases, access to their own venture capital schemes. Both bankers and equity investors will need to be convinced about the viability of the business. This depends initially on two things -sales and management. Therefore, when approaching financiers the first priority is to prove that there is a sufficient market for the product that it will achieve reasonable sales in the market and that management are experienced and capable enough to identify problems and devise solutions to steer a successful path. Once this is proved, the financial aspect can be detailed. Later in this publication, we show the key features of a business plan to be presented to a financier. Providers of loans and providers of equity will have different motives in assessing a business plan: Providers of equity are looking for capital gain (normally a minimum of 35% compound return on their investment) and a built-in exit route; 11 Sources of Venture Capital under £250,000 Lenders are not seeking to make such large returns, nor do they look to assume such high levels of risk as the equity investor. This approach will be reflected in the lower cost of their funds. Since they seek lower returns, one of their prime aims will be to minimise losses, which may in turn re...
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