With decades of combined experience in the financial services sector, we’ve seen many clients seek business finance and have also raised funds for various ventures. While each type of finance has its own specific requirements, there are common areas that every application or pitch should address. Here are some key points to consider:
How Much? What For? When?
Before approaching a finance provider, clearly define the amount needed, the purpose of the funds, and the timing. Too often, businesses know they need money but can’t specify how much, why, or when. This information is crucial as it influences the type of finance that’s appropriate. Some options have borrowing limits, others are for specific purposes like purchasing capital items, and some take longer to secure. No project ever gets funded without clear answers to these questions.
You and the Team
Any person or organisation providing finance will want to know about the individuals running the business. This could be the business owner or key members of the management team in larger enterprises. Financiers need to be convinced about their background, experience, skills, and capacity to run and grow the business. This is particularly important when seeking business angel or equity investment. Investors and lenders prefer to deal with people they trust and feel confident about.
What Does Your Business Do?
While this may seem straightforward, many businesses struggle to articulate their operations clearly and concisely. It’s vital that any finance provider understands what the business does. Craft a description that someone outside your business can understand, and test it on friends and family who are unfamiliar with your work. If they don’t get it, chances are the finance provider won’t either.
Problem and Solution
Think of your business proposition in terms of problem and solution. Rather than describing your product or service in brochure-style detail, explain the problem that exists for your customers and how your product or service provides the solution. A strong proposition addresses a significant, global problem, increasing the chance of success.
What Makes You Different?
For investors, particularly business angels and equity investors, it’s important to show why your offering stands out from the competition. Identify your unique selling points (USPs) and demonstrate how your business competes. Whether it’s faster service, better quality, or innovative features, highlight what makes your business unique.
Customers
Describe who your customers are. Robust businesses often have multiple customer types, such as retail, wholesale, and public sector contracts, which add resilience. Explain the potential size and value of each customer type. A business with a solid, established customer base is more attractive to investors. Customers not only provide revenue but also add value to your business.
Market/Marketing
Don’t confuse customers with the market. You sell to customers, not the market! Think of the market as a large box with your customers inside. To reach them, you need to lift the lid through marketing. If your marketing is weak, seek help from specialist marketing businesses or funded programmes available in the West Midlands. Focus on engaging with your existing customer base and identifying effective channels to reach new customers, such as social media, exhibitions, advertising, direct selling, and websites.
Whatever type of pitch, application, or business plan you are working on to support your finance application, it’s important to get feedback. Just like product-testing a new item before selling it, have people review your finance application to ensure it’s polished and effective.
Ready to take the next step in raising finance? Contact our team for personalised support and guidance tailored to your business needs.
