Financing your business Rav Garcha 12.09.2013 denariusconsulting Providing creative solutions to your business problems

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(c) Denarius Consulting Ltd, 2013 WELCOME Who Am I? Who Are You? (c) Denarius Consulting Ltd, 2013

(c) Denarius Consulting Ltd, 2013 WHAT ARE WE COVERING? A The Finance Puzzle 1. Why raise finance? 2. Types of finance 3. Deciding the best solution? (c) Denarius Consulting Ltd, 2013

(c) Denarius Consulting Ltd, 2013 WHAT ARE WE COVERING? B The Business Plan 1. What is a business plan? 2. Common pitfalls 3. Presenting the business plan (c) Denarius Consulting Ltd, 2013

WHY DO YOU WANT TO RAISE FINANCE? TASK 1 WHY DO YOU WANT TO RAISE FINANCE? (c) Denarius Consulting Ltd, 2013

(c) Denarius Consulting Ltd, 2013 TASK 1 To buy capital equipment (computers, plant and machinery) To conduct research and development To take a product or service to market To increase marketing activity To improve working capital To refinance Merger Activity (c) Denarius Consulting Ltd, 2013

(c) Denarius Consulting Ltd, 2013 WHY RAISE FINANCE? In my experience this is what I have found Most business do at some point need finance My clients normally require finance so that they are able to move forward with their business Sometimes this is because they wish to purchase capital items but other times it is because of working capital commitments There are many reasons why a business needs to raise funds (c) Denarius Consulting Ltd, 2013

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WHAT TYPE OF FINANCE SOLUTIONS ARE AVAILABLE TO YOU? TASK 2 WHAT TYPE OF FINANCE SOLUTIONS ARE AVAILABLE TO YOU? (c) Denarius Consulting Ltd, 2013

(c) Denarius Consulting Ltd, 2013

(c) Denarius Consulting Ltd, 2013

Deciding the best solution? It depends! Is the finance short term or long term? Is the finance to fund working capital or is to purchase fixed assets? Is it to enable you to invest in research and development? Is it to fund a property or business expansion? The type of finance you require depends very much on your business and its uniqueness! (c) Denarius Consulting Ltd, 2013

Deciding the best solution? My approach What is the strategy of the business? What are the figures telling me? Can the business justify the investment to financiers? Prepare accurate forecasts showing the impact of the finance Then recommend to the business owner what steps to take to secure the finance (c) Denarius Consulting Ltd, 2013

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(c) Denarius Consulting Ltd, 2013 TASK 3 WHAT IS A BUSINESS PLAN? WHAT SHOULD IT INCLUDE? (c) Denarius Consulting Ltd, 2013

(c) Denarius Consulting Ltd, 2013 What is a Business Plan? My definition A business plan is a compelling picture of an entities future success It should tell the financier a little about the background of the business It should BRIEFLY cover the background of the key personnel The plan should include competitor analysis as well as a marketing plan The financial aspects should focus on cashflow forecasts and projected P&L and Balance Sheet (c) Denarius Consulting Ltd, 2013

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WHAT IN YOUR EXPERIENCE GOES WRONG? TASK 4 WHAT IN YOUR EXPERIENCE GOES WRONG? (c) Denarius Consulting Ltd, 2013

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(c) Denarius Consulting Ltd, 2013 Common Pitfalls In my experience this is what I have found Too much time spent on past exploits Sometimes nothing about the owners of the business Strategy and vision nearly always ignored - why? No competitor analysis – simply saying there are no competitors is not good enough! There is no case made of what the money is for and what the impact will be on the business – in other words no compelling picture of an entities future! (c) Denarius Consulting Ltd, 2013

(c) Denarius Consulting Ltd, 2013 Common Pitfalls Often the worst mistakes are always the financials: the figures don’t add up; the sales cannot be justified; expenditure is missed; interest payments are incorrect and the message to the financier is not only can I not count but the figures are all made up! And remember: You must always show the financier how they will get their money back! (c) Denarius Consulting Ltd, 2013

Presenting the Business Plan http://www.youtube.com/watch?v=PiEOd7Ks8xk (c) Denarius Consulting Ltd, 2013

WHAT DID YOU THINK OF PRESENTATION ONE? TASK 5 WHAT DID YOU THINK OF PRESENTATION ONE? (c) Denarius Consulting Ltd, 2013

Presenting the Business Plan This is what I think: Wrong person presenting Don’t let emotion get in the way A fine balance between emotion and passion! What is the strategy? Where were the figures? What was the compelling picture? How are the financier going to get their money back? Did they really grab the financiers attention and say you really do need to invest in me!? (c) Denarius Consulting Ltd, 2013

Presenting the Business Plan http://www.youtube.com/watch?v=X8iZLL6fgNg (c) Denarius Consulting Ltd, 2013

WHAT DID YOU THINK OF PRESENTATION TWO? TASK 6 WHAT DID YOU THINK OF PRESENTATION TWO? (c) Denarius Consulting Ltd, 2013

Presenting the Business Plan This is what I think: Clear, concise, and knew their business Showed great passion and brought along examples of their products Were able to reveal figures clearly and had a compelling picture of the future Ticked the right button with regard to the GREEN ECONOMY Had the financiers drooling at the prospect of getting involved in the business! (c) Denarius Consulting Ltd, 2013

Presenting the Business Plan Some pointers: Select the best person for the presentation – it isn’t always the MD! Explain what the business is all about Show that you understand the numbers – how are your forecasts compiled; you understand the financing costs and that you know the term of the finance Show passion; knowledge and confidence KISS at all times – do not complicate things! Always invite questions – then answer them!! (c) Denarius Consulting Ltd, 2013

Financing Your Business Recap: Why do you need finance? What types of financing solutions are their? What is the best solution? What is a Business Plan? What should it include? What are the common pitfalls? Presenting a business plan successfully (c) Denarius Consulting Ltd, 2013

Financing Your Business A little extra: Your chance to ask any further QUESTIONS (c) Denarius Consulting Ltd, 2013

Financing Your Business Stay in touch: E: ravgarcha@denariusconsulting.net T: 0845 299 7478 @ravgarcha uk.linkedin.com/pub/rav-garcha/38/8b5/40/ (c) Denarius Consulting Ltd, 2013 (c) Denarius Consulting Ltd, 2013

Denarius Consulting Ltd Denarius House 301 Heath Road South Bournville Birmingham B31 2BN T: 0845 299 7478 F: 0845 280 1500 E: info@denariusconsulting.net (c) Denarius Consulting Ltd, 2013