Head of Entrepreneurs at Arbuthnot Latham Private Banking, John Hilson, a recognised authority in the entrepreneur and business development field, has shared his thought-provoking insight on how businesses can effectively communicate their readiness for investment.
In an era where securing investor interest is a pivotal milestone, Hilson’s perspective sheds light on strategies that go beyond financial metrics, offering a comprehensive approach to positioning your business as an attractive investment opportunity.
We believe that this insight will greatly benefit your audience and spark meaningful discussions on the essential elements that define a business’s preparedness for investment. I have included the quote below for your consideration:
Hilson said, “Balancing the investment needed to grow your business with ensuring your business is organisationally scalable are two mutually inclusive but slightly different considerations.
“You shouldn’t be looking to present a fully scaled business to investors. For example, if you’re turning over £2 million, an investor would be unlikely to expect you to be a functioning like a £10 million-turnover business. Building scalability into your roadmap is the key. Business growth is iterative, and it is a progression, you really want to find an investor who appreciates this.
“From my conversations with entrepreneurs, investors are – in the first instance – looking for a sound business, led by the right people, with good growth potential. To that end, your focus should be around ‘people’ and ‘plan’: to demonstrate that you have a sound roadmap which delivers growth, accommodates increasing levels of governance, and allows you to scale.
“It is not about delivering everything up front, but putting a business plan to investors that is specific, transparent and achievable, after all they are buying into the people running the business, as much as the underlying numbers.”
These are the team’s top five essential tips for business owners looking to show investors they are investment ready:
Strategic business blueprint
Craft a meticulous business plan that delineates your company’s purpose, vision, and strategic goals. Present a thorough analysis of your products or services, making clear your target market, competitive landscape, and nuanced financial projections.
Articulate with precision your unique selling proposition (USP) and elucidate how your business differentiates itself within the market.
Financial clarity and precision
Offer a transparent and precise portrayal of your financial standing, encompassing comprehensive statements such as income statements, balance sheets, and cash flow projections. This includes key financial metrics, showcasing a profound comprehension of your company’s financial robustness.
Clearly communicate how the investment will be used and the expected return on investment (ROI) for investors.
Demonstrable traction and milestones
Showcase tangible evidence of market validation, exemplified through customer testimonials, successful pilot programs, or notable sales tgrowth. Highlight key milestones attained and articulate future benchmarks that the infusion of capital will catalyse. Provide compelling data on customer acquisition, retention rates, and strategic collaborations fortifying your market presence.
Risk management expertise
Methodically identify potential business risks and articulate proactive strategies meticulously designed to mitigate these challenges. Display a comprehensive understanding of market dynamics, regulatory nuances, and potential disruptors.
Communicate how the investment will be used to address challenges and capitalise on emerging opportunities.
Robust leadership ensemble
Spotlight the depth of expertise and track record embedded within your management team.
Highlight the team’s relevant industry experience, distinctive skills, and notable accomplishments. Clearly define roles and responsibilities within the team structure, underscoring the team’s collective capability to execute the strategic vision.
Should you wish to delve deeper into this topic or explore additional insights from Arbuthnot Latham’s John Hilson, please feel free to reach out. We are confident that this thought leadership quote will resonate with your readership and contribute to the ongoing dialogue on effective investor engagement strategies.
