Advice for growing businesses on finding funding

New ventures, innovations and product launches often require substantial funding and there is a wealth of options to help companies achieve success, as David Owen of Rowan Group explains.

Help for growing businesses ranges from personal investment, including bank lending and overdrafts and loans from friends and family, through to third party equity investment.

There is also a wide range of support in the form of grants and low cost finance available from Government and other bodies, usually geared to a specific region or a certain industry.

Finding the right solution for your particular needs is complicated and time-consuming and companies have to jump through many hoops in order to get the funding they need to progress their plans.

However, choosing and accessing the right type option at an early stage is generally critical to the overall success of the project.

The first step - whether you decide to go for debt, equity funding or to seek grants - is always to take stock of your current position and make sure you have a clear picture of your overall funding requirements and how you intend to use the funding raised.

This will all form the basis of the business plan you will inevitably present to potential investors.

The business plan is always the cornerstone of any campaign to raise finance, though the level of detail needed may vary depending on the amount and type of borrowing sought.

It provides an opportunity to assess the success of the business to date and what you have already achieved and allows you to articulate your vision for the future of your company.

Having set out the objectives for the company and the potential for growth it becomes easier to assess how much funding and potentially what type of funding would be most appropriate to help achieve those goals.

The business plan then becomes an essential marketing tool, allowing you to present your company, your concept and your strategy to potential investors.

In broad terms there are two main ways of raising finance for your company.

You can either take on a debt - through bank loans, overdrafts or leasing arrangements - providing you can put up sufficient security - or you can sell equity in the company.

In the second instance investors will provide a sum of money in return for a stake in the company, based on the amount invested and the estimated value of the business.

In either case it is also important to assess what the finance will cost in fees, repayment terms or share of profit and in terms of control over the business.

It may also be necessary to seek long-term funding in staged payments, rather than a one-off cash lump sum.

And you may also need to consider going to several sources and putting together a mix of funding to achieve your overall requirements.

In all these instances seeking professional advice will be a key component of your overall strategy.

There are many organisations available to give you legal, financial and practical help in achieving your goals.

David Owen is director of sales and marketing specialists Rowan Group, which helps businesses large and small to make the most of their great ideas with a unique blend of advice and practical hands-on support.

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