Making A Pitch For Investment In Your Small Business

Small businesses often struggle to get finance for their business. Bankers are a cautious lot and want to see a strong balance sheet, or personal guarantees from the company directors. It must always seem like a catch 22 situation for owner-managers. Afterall, if they had a strong balance sheet (i.e. cash) or enough funds to provide a personal guarantee, why would they be going to the bank in the first place?

That is why many small business turn to private investors as a source of funding. But getting the pitch right first time becomes very important.

When potential investors have taken a look through your business plan and are interested in what they see, they will want to arrange a meeting between themselves and your business representatives to go through things in more detail before making a decision.

The pitch to potential investors is a very important event and you should take the time to prepare for it thoroughly, making your case and preparing for all eventualities with just as much care as went into creating the business plan that attracted them in the first place, if not more.

The owner, marketing and financial directors should all be present at your pitch, as these will be the key figures from your management team who can field any questions raised from the investors and explain exactly what the business is about and where it is headed.

The investors will, in addition, be keen on seeing your management team in operation, so you should all participate to the same extent rather than select a single spokesperson.

This will give the investors the opportunity to appreciate your management team’s depth and range of experience and expertise at the helm of the company.

The crucial message you have to get across at the pitch is how your investors can benefit through injecting funds into your business.

Careful planning for the pitch will make you more confident and feel less intimidated by the inevitable difficult and often technical questions that will be thrown at you at the end of the session. As ever, forewarned is forearmed, in battles and business pitches alike.

Other than banks and investors, the options for raising finance then become more limited. However, smart use of invoice financing could help, whereby loans are provided against invoices that have been raised but not yet paid. Invoice financing used to have stigma associated with it, but in recent years has become mainstream. In addition small businesses should look at their tax efficiency to minimise their outgoings. For very small businesses, contractors and the self employed, an umbrella company solution can be helpful.

Whatever you as a small business owner decide to do, keep the faith and persevere.