Successful investment proposals come in many shapes and sizes – they may be long documents – or they may be short documents. Sometimes, there is little or no document at all (although this is more rare).
The key thing that all proposals do is they find a sweet spot between the conflicting demands of putting together the best team, developing the best product and creating a profit with return to shareholders.
These three elements – team, product/ service and finance (ie cashflow, investment and profit) are like the base elements – fire, water, air and earth. Without them, nothing can be created – but equally, they are in conflict.
Team, product and finance in conflict?
Think about it, a top team might include the CEO of a FTSE 100 company – but he or she might cost you £50k to £100k per year. Can you afford this? Or, perhaps, would you want to afford this?
Equally, you might be able to design or develop the perfect product is only you had £1m – but, would you be able to make a profit?
Lastly, if you cut costs so far that you have no money to spend on sales and marketing, how will you ever launch your product or service?
Hence, these three areas are in conflict – more spent on marketing means you need to raise more money and will offer lower returns in the short term (although, with the prospect of better returns in the future).
Equally, you want to build a non-exec and management team with the right experience, knowledge and contacts. But, are they all committed to your project? Will you be able to pay or reward them sufficiently? And, if you are giving shares and options away to your management team, have you left enough on the table to make the investment attractive to investors?
That’s why the search for funding is really about the push and pull between these three factors.
And, that’s why, when you take our questionnaire – Is My Business Ready for Investment - you’ll begin to see whether your proposal has adequately dealt with all three elements – team, money and product – and therefore, whether your business is truly investment ready.
Of course, many entrepreneurs don’t take finance – but, they still go through the process. Why? Simple – they are investing their time and money and so want to know that they are making a good investment.
That is why, even if you don’t want to take on external finance it is still a great idea to ask – Is My Business Investment Ready?
So, now is the time to take the survey and find out…is my business investment ready?