“Start selling before attempting to raise money” – Business funding tips from global SME influencers
Forming your own firm and finding business funding can be a strain. Whether you look near or far, you are responsible for the investors’ money, be they family, friends or fairies… OK, angels.
With small to medium-sized enterprises (SMEs) accounting for an annual UK turnover of £1.9 trillion in 2017, there’s more and more incentive to start-up your own enterprise… but where can you find the money?
At the start of March, Sage hosted a Twitter discussion with a number of influential people in the social media SME world on the topic of business funding.
A selection of the Sage Top 100 global business influencers for 2017 discussed their journeys through the SME landscape, how they found funding for their businesses and how they continue to thrive.
These business influencers are highly experienced in the SME field, with many – including GrowBiz Media founder Rieva Lesonsky, executive coach Tripp Braden and business growth expert Ian Knowlson – specialising in helping new and established businesses to grow and strategise in their industries.
Here are some of their key responses on business funding.
Have friends and family supported your business? How did it work out?
“Oh yes, for sure. When I first announced I wanted to start a business, two of my friends immediately stepped up.” Rieva Lesonsky @Rieva
“It works best when the business owner starts with the end in mind on how they accept and structure these investments. Clarity is critical for longer term success.” Tripp Braden @TrippBraden
Have you tried asking your bank for business funding? Were they receptive?
“I found them most unhelpful in 2011. Sadly many of my clients’ experiences have been similar. There are many other funding sources out there if you have great ideas and angel investors plus local entrepreneurs are often a great source.” Ian Knowlson@IanKnowlson
What are your experiences of “dragons”? Could you work with them?
“Some investors are looking for a quick in-and-exit mulitiplier, others for a strategic portfolio breadth addition and others for a long-term-consistent-dividends return. If unsure, ask them in advance.” Ian Moyse @imoyse
Venture capitalists may have pots of cash but what are the “strings”? Has it worked out for you?
“Learn how to walk away and when to run… To be successful, you must understand where the true value in your business is.” Tripp Braden @TrippBraden
“VC funding is rare. They’re only interested in funding fast-growth businesses in certain industries and you need to be wary.” Rieva Lesonsky @Rieva
Crowdfunding seems easy and accessible but are there hidden drawbacks?
“My perspective is to start selling before attempting to raise money. If you are able to sell, you won’t need as much and the terms of your dilution will be more favourable if you really do need to do a raise.” Mike Briercliffe @mikejulietbravo
What if you’re turned down for funding multiple times – should you re-evaluate your whole business plan or keep going?
“It would certainly make you think so, wouldn’t it, but it depends on your passion. Would be good to have quality feedback as to why your plan was rejected – was it too ambitious sales line or missing detailed costs?” Ian Knowlson @IanKnowlson
What’s the best bit of advice anyone has ever given you or your business?
“Understand what is critical and what is nice to have; don’t overextend yourself. Become good at making deals so that you can keep reserves higher when better opportunities show up.” Tripp Braden @TrippBraden
“I was told as MD to focus on cash flow. That my primary goal is to pay the bills and delegate the rest. It’s worked.” Luke Brynley-Jones @lbrynleyjones
Final thoughts on business funding
Being the boss, the buck stops with you. If you find investment based on mutually beneficial and agreeable terms, chances are that both sides will be happy. Now all you have to do is turn a massive profit.
What are your experiences of business funding? Let us know in the comments below and do follow our #sagetop100 on Twitter for our global business influencers’ updates and thoughts.