GET FUNDING FOR YOUR EVERYDAY BUSINESS
A recent World Bank report ranked Singapore as the the best country to do business in the world, for the 7th year in a row. The report stated that while Singapore did well for most of the 10 regulatory areas measured, but there was one where Singapore scored an especially low average rating – getting credit. Although it’s mostly good news for businesses. The challenge of getting funding still remains. Whether you choose to raise capital from people you know, banks, or investors, many people find it difficult to ask others for money.
Asking around, everyone seems to think with the way the economy is going, the way the government is talking about slowdowns various industries will experience, that it will be tougher to approach banks for loans and investors will be more reluctant to put their money behind your business
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But is all this hearsay true? Is that really what banks and investors are thinking? Michael Hutchison facilitated a roundtable discussion with venture capitalists and small business financing arms of some leading banks and found out some interesting facts. The representative from the banks stated that they actually lent out more money from previous years to small businesses and entrepreneurs.
Lost in Translation Entrepreneurs and small business owners know their product very well, the services they offer, how to market, how to sell, but they aren’t always familiar with the needs of the business. They know they have a good business plan, but they don’t know exactly how much capital the need to fulfill that plan.
So when these entrepreneurs and small business owners approach banks and investors without a clear idea of how much money to ask for, or asking for funding for the wrong reasons. Most business owners approach banks for money to fuel their company’s continued existence; pay the bills, fund employee payroll, purchase equipment. But banks and investors are asking questions like, “How is your cashflow?” “What does your balance sheet look like?” “What are your long-term plans?” “How do you intend to grow your business?” “How will you pay me back?” or “What returns can I expect?” Banks and investors aren’t asking these questions to be difficult, they’re like doctors asking the questions to assess the health of the company. Most business owners haven’t spent much time building relationships with the bank or investors BEFORE they need funding. It’s like trying to get money from a total stranger. Do I know you? Where’s the trust? Where’s the credibility?
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Business owners need to start bridging the gap between themselves and their sources of funding, to get over the barriers of communication and start speaking the same “language”.
Think Differently
Entrepreneurs and small business owners need to start thinking differently. To start viewing these sources of funding as allies instead of enemies. Be prepared to answer these basic questions about your business. Start building a relationship with a banker or investor now. Speak to them about your options, your plans, ask for advice, recommend friends to them, and be open and transparent. They may still turn you down, but the relationship is already there. So you can ask why, what steps need to be taken and receive the feedback you need to move your business forward. You can better prepare yourself by educating yourself with the “language” of financing; what are angel investors, what is venture capital financing, what loans are available. Ask around other successful small businesses in your industry; what did they do, how did they do it, who did they go to. There’s a lot more to learn about getting funding for your business and Michael Hutchison would love to share his strategies for getting other people’s money to fund your business. You need to be at the Wealth Summit and hear him talk about this important topic so you can take your business further, turning this tide of economic turmoil into a wave of growth for your company.
Success Resources: http://www.srpl.net/