Category Archives: Finding finance

Embracing the Next Chapter: Company Partners Journey Forward

Welcome to Company Partners official blog! We are thrilled to announce that we are embarking on an exciting new period of growth and innovation. In this blog post, we will share our vision, goals, and strategies as we move forward into the future. Join us on this journey as we embrace new business opportunities, expand our horizons, and strive for excellence.

1. Reflecting on our Past Successes:
Before we dive into the future, let’s take a moment to acknowledge the achievements and milestones that have brought us to this point. Company Partners has experienced remarkable growth since 2003 and success over the years, thanks to the dedication and hard work of our incredible team. We have built strong relationships with our members, delivered exceptional services, and established a solid reputation in the industry.

2. Embracing Change and Adaptability:
In today’s fast-paced and ever-evolving business landscape, it is crucial for organisations to embrace change and adapt to new realities. Company Partners recognise the need to stay ahead of the curve, anticipate market trends, and continuously innovate. Moving forward, we are committed to fostering a culture of adaptability, embracing new technologies and methodologies.

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3. Vision and Goals:
As we embark on this new period, our vision is clear – to become a global leader in joining investors and entrepreneurs together. To achieve this, we have set the following goals:

a. Expand our Market Presence: We will explore new markets and opportunities to expand our reach and increase our customer base. Connect business owners, CEOs, Non Executives, Entrepreneurs, Start-up Founders, Mentors and Investors at our annual networking event.

b. Foster Innovation: We will invest in research and development, encourage creative thinking, and foster a culture of innovation within our team.

c. Enhance Customer Experience: We will prioritise customer satisfaction by delivering personalised experiences, improving our services, and providing exceptional customer support.

d. Develop and Empower our Team: We will invest in the professional development and growth of our employees, empowering them to reach their full potential and contribute to our collective success.

4. Strategies for Success:
To achieve our vision and goals, we have outlined several strategies that will guide our actions moving forward:

a. Digital Transformation: We will leverage technology to streamline processes, enhance efficiency, and improve overall productivity.

b. Continuous Learning and Improvement: We will foster a culture of continuous learning, encouraging our employees to acquire new skills and knowledge, and constantly improve our processes and offerings.

c. Customer-Centric Approach: We will place the needs and preferences of our customers at the centre of everything we do, ensuring that we exceed their expectations at every touchpoint.

The future holds immense promise for Company Partners, and we are excited to embark on this new chapter. With a clear vision, well-defined goals, and a commitment to innovation and customer satisfaction, we are confident that we will achieve great success. We invite you to join us on this journey as we embrace the next chapter and create a future filled with growth, prosperity, and excellence. Stay tuned to our blog for regular updates on our progress and exciting announcements. Together, let’s shape the future!

Does luck play a part in business success?

Given that today is Friday the 13th I thought it interesting to look at the role luck plays in business success.

Firstly it would be wrong to say that luck, or being in the right place at the right time is non-existent – it does happen. Think of those who bought property in places like London some time ago, never thinking that prices would sky-rocket.

Perhaps simply the luck of meeting just the partner, Investor or contact that you need at absolutely the right time for your fledgling business.

Even starting a new business whilst unbeknownst to you, significant market and trend changes mean that it suddenly becomes a roaring success

However, as the writer Nesta Jojoe Erskine has said, “You don’t get lucky while sitting in the sofa with arms crossed doing nothing. You can be lucky only when you are prepared.”

There is strong evidence that the more you put yourself “out there”, make as many contacts as you can and take positive action, the greater the likelihood of having luck find you.

I recently was reminded of the famous quote by Jack Nicklaus, “The more I practice, the luckier I get”, and the similar “The harder I work, the luckier I get” by Samuel Goldwyn.

Yes sometimes fortune smiles unexpectedly, but most successful people have not sat around waiting for that to happen, they have put themselves in a position through planning and endeavour to allow that lucky break to happen.

Could the “Experts” be right about Brexit?

In an alarming development Britons are starting to wonder if the “so called experts” might have something going for them.

We’ve believed for years (well ever since Michael Gove revealed in his Brexit speeches that experts are always wrong) that people who have studied a subject for decades can’t be right.

Tony Simonds, retired Sales Executive said: “The so-called experts are always telling you things are bad for you, and it was only after my second heart attack that I thought their advice about not having deep-fried black pudding for breakfast is probably correct.

“They might be right about smoking too, so I’m going to look into that, although it flies in the face of lots of stories about people who smoked 80 Capstan a day and lived to 100.”

Store Manager Vicky Thompson said: “I’d always assumed experts just liked sounding important.

“However that advice about leaving a safe distance between you and the car in front turned out to be correct. I’ll definitely be telling my friends once the concussion’s worn off.”

The public is now grudgingly accepting that experts may have valid opinions on other subjects, such as patting tigers, swimming far out to sea and even the state of our economy after Brexit

However, Van driver Nick Baker said: “There’s only one sort of experts I trust and that’s UFO experts. Finding out all that highly classified government information takes a lot of work and you have to respect that.”

With acknowledgements to thedailymash

The Easiest Way to Sack your Boss!

Venturing out on your own can be a daunting task. Your nine to five brings with it a certain security net, however, the only way to achieve your dream is to take the leap and become your own boss!

In order to make sure that you are successful in this endeavour, though, it is important that you find the option that is right for you. Because, despite what you may think, there is more than one way to become a successful entrepreneur.

Below, we take a look at some of the simplest ways and give you tips on how to make sure that your journey to entrepreneurship is a positive one.

1. Start a business from scratch

This is what most people will think of when they think about becoming an entrepreneur. There are a lot of risks involved in starting a business from a scratch, however, if you have an idea that you have confidence in and you are willing to put in the work, this is probably the best option for you.

The most difficult choice to make will be when to hand in your notice and throw yourself fully behind your idea. Many entrepreneurs try to keep their day job as long as possible in the beginning stages of their business so that they have a salary while they get their business off the ground.

You need to be realistic about your financial situation. How much will you need to start your own business and how long before you are realistically able to pay yourself a salary?

2. Buy a business

Buying a business is another way to go about setting out on your own and being your own boss. The advantage of this is that you can see if the business has a proven track record.

This is very handy when you go to the bank to ask them for a loan. Proven financials will give far more of a chance of getting the money that you need to purchase the business.

For example, if you are looking to buy a pub, buying an existing one will come with an already established customer base and supplier relationships. You will just need to choose the right one to buy.

3. Find a partner

Going into business can be made a lot easier if you’re able to find the right person to partner up with. Having a partner can double your resources in terms of skills and capital!

It is, however, vital that you find the right person to partner up with. The wrong partnership can turn sour so spend time making sure that you have the same goals and ideals.

4. Find investors

The financial pressure of starting a business can be the single biggest reason to stop you sacking your boss. There are, however, a lot of financing options that are not necessarily the traditional routes of looking to banks for loans.

Why not look to angel investors to help you get your business going? If you have the right idea and you are willing to put in the time, there may be the right investor out there who will believe in your vision.

If you are able to carefully chose the right path to becoming your boss, there is every possibility that you can enjoy the process. Every future boss must find the option that is right for them and their circumstances. If you are able to do this, you’ll be on your way to success!

By Matthew Hernon: Account Manager at Dynamis looking after Business Transfer Agents and Franchises across BusinessesForSale.com and FranchiseSales.com

What will make my business more attractive to Investors?

How to get Investment Investors have a lot of choice and you are in competition with all other investment opportunities, the final decision on which gets investment will be those with the best combination of good sustainable profit and lowest risk.

That may not be the highest profit, or the least risk, but an acceptable (to that Investor) mixture of the two.

The following will greatly help your chances of investment:

1. Know your market
- Show it is growing and sustainable (use facts)
- That you know the competition
- You can say what your competitive edge or uniqueness is
- What issue or need you will address
- Who will buy your product / service (your target customer)

2. Proof
Great ideas are a dime a dozen and investors have heard all the hype before, the more you can do to show your concept works and people will buy it, the better your chances of investment.
- Projects just at the idea stage seldom get funding
- For new products you at least need a prototype
- For services or retail you need at least some sales

3. Gain confidence in your ability to grow their investment and that you can work with the Investors
- Previous experience in this market
- Good work ethic and energy
- Confident, not arrogant, you must be open to input and be flexible
- Ideally an experienced team of people who can execute the plan, this isn’t always possible, so show you know where gaps may be and how you will fill them. Too many gaps however will start to increase the risk

4. Business model and implementation

- How you will make money (and a profit) from this great opportunity
- Understand all the costs and numbers, making sure they are realistic
- An exciting but achievable sales forecast
- It’s not often the idea but how it is implemented that counts, show that you understand this

5. Skin in the game
- Have you invested your own money in this? Investors like to see that you are committed and taking the same risks that they are. Sometimes your own funds may not allow much opportunity to do so; in which case you will need to talk about the other commitments you’ve made to the business.

6. Government tax breaks and Incentives
In the UK there is the Enterprise Investment Scheme (EIS), in the USA there are local State incentives to encourage new small businesses in their area. Some States have more advantageous and flexible tax breaks if you incorporate there, such as Delaware, Nevada and Wyoming.

Where ever you are, look into such incentives and show Investors you are knowledgeable. Don’t expect free grants to be available anywhere however, those days are past.

7. Lean start-up
Investors will expect you to use their investment to grow the business. Not mainly to pay you a salary or provide you with corporate luxuries. Show you are using the lean start-up principle; you can begin taking a better salary and working conditions as the profit grows.

Finally, make sure your plan is clear and that you are able to describe in a sentence what your business does. In one more sentence you should be able to describe your business model (how you will make money from the activity).

Clarity goes a long way in convincing Investors that you know what you are doing and that they can intrust their funds to you.

Types of Business Funding

Seed money

Do you need funding?

Start-up businesses often think that they need to find an investor. We only have to read in the papers about the latest internet billionaire to know that big funding means big success.

Yet most businesses can get going, or even grow without external investment. It depends on the amount required to gain entry into your market and whether you have sufficient funds to make a start, perhaps growing organically through sales.

The injection of funds into a business can however jump-start a project, or allow a more rapid growth. So if funding is desired it’s useful to think about the options for doing so:

Investment cycle

There is a natural progression of how a business is funded. Initially it may be that the business is financed by the owner or by approaching family and friends. This may be sufficient by itself for your business.

Alternatively, or perhaps as a follow-on, a local bank might be approached. Although nowadays these have been less helpful for young businesses, so after proving the concept, many tend to seek business angels.

At the next stage beyond this, venture capital firms might be brought in. Few companies go straight out and raise multi-millions; those that do are often high-tech businesses with known entrepreneurs, or ground breaking technology.

Types of funding:

Self-funded
Traditionally the way that the majority of businesses get going. For further investment it also shows your commitment in that you have put your own money into the concept and is invaluable in gaining that first bit of traction that Investors look for.

If the start-up business is taking the form of a partnership it will need to be made clear in the partnership agreement exactly how much of the funding each partner is providing and whether this entitles them to a greater or lesser proportion of the partnership profits. See Partnership Agreements

Loans
Banks will normally only loan money against you having security to offer. These may be assets of the business or personal assets such as your house. They are not entrepreneurial and don’t take risks based on you having a good idea.

Many Business Angels will include a loan in addition to purchasing equity in the business as part of the way in which the funding deal is structured.

Private equity funding
This is the generic name for sources of funding, normally in exchange for equity in the business. It includes both Business Angels and Venture Capital companies. People sometimes confuse the two. The differences are:

Business Angels

Anything from £1000 to £1M (although that would require several banded together).
Will look at start-ups and young businesses
Since they are investing their own money they can take more risk.
Often want to contribute knowledge or contacts

Venture Capital

£1M plus (normally)
Not for start-ups or just at idea stage
They are investing a fund comprised of other people’s money, so have to take less risk than Business Angels.
May place own people on board and require strict reporting

When exchanging equity in a business for funds a legal document must be agreed that specifies the terms of the investment. Venture Capital companies will have a range of agreements to use from Investor Rights Agreements, Stock Purchase Agreements and Term Sheets. It can be expensive and time consuming to raise money.

Agreements with Business Angels can be quicker and much less costly to organise, but never be tempted to cut costs so much that a well thought out signed agreement is neglected. There has been much woe and falling out of parties when issues occur that haven’t been previously considered and placed in a legal document.

Private equity funding can come in stages as the business grows:

• Seed funding
• First round
• Second round
• Later stage
• Mezzanine
See Types of Private Equity funding

Grants
There are only a few government or institutional grants available to businesses. These tend to be market sector and geography specific. Whilst serving a useful purpose for those able to claim them, they are so few that they are not applicable to most businesses and so not covered here.

For young businesses, the more you can do in proving your concept works and gaining what is called “traction” the more offers of help you will get and be in a better place to negotiate terms.

Good reasons for the use of Business Angel investment

One of the key bits of information that Business Angels or Investors into a venture will want to see is how the funds are going to be used.

I’ve seen every possible use given, from the perfectly sensible – “product development”, to the unlikely to succeed – “no one will lend to me any more and I need money to pay my rent, then I can get a business going”.

For some time I communicated with a chap who needed funds to train as a commercial pilot, he would then pay back the funds with significant interest out of his subsequent earnings. Sounded risky, relying on his ability to pass the exams and training, but he was a pleasant and determined guy, I hope it worked out for him.

So what ticks the box for Investors? Generally this can be anything that helps to grow the business:

Additional market research
Product development
Manufacturing facilities or equipment
Marketing of the product or service
Recruitment of staff
Working capital

Within this you do need to explain why you feel this will expand the business and some explanations are more attractive than others. Throwing money at marketing a new business that has never been operational is risky, but bringing to market an exciting new product or service from an already established business could be a winner. Taking on more staff to meet a high demand is good, whereas taking on staff to simply start an unproven idea is not so attractive.

Note that Investors are not interested in reducing debts or to pay yourself a high salary.

Surprisingly, many of the business plans and requests for funding that we see have excellent write ups of the opportunity, but completely miss out describing how the Investment will be used. Not only should that be very clear, but it should be part of the financial spreadsheets, showing when tranches of investment come in to balance the operational costs.

If it isn’t clear how the investment will be used in your proposal, but you have been fortunate in securing a meeting with an Investor, be prepared – they will ask!

Make your business scalable – the Investor holy grail

Investors look for business growth

Firstly let me say what I mean by scalable. That each new customer produces additional revenue for very little addition cost.

Think of software for example, once the costs of developing and producing the first copy are met, each additional sale of the software has minimal costs. Whereas a service orientated business such as consulting is limited by the number of consultants available and each one has a significant additional cost attached.

A scalable business can grow large and produce high profits, every Investors dream.

If you are starting from scratch and have a choice of the type of business to run, think about fixed cost Vs variable costs for that business. Fixed cost will be that which you need regardless of the number of orders you receive – office or factory rent, insurance and basic salaries for example.

The variable costs are those associated with each order, such as the cost of making that product or supplying the service. It can be materials that you have to buy in for each order, assembling or manufacturing the item, or the cost of hiring and paying the wages of an additional service person to fulfil the order.

There is of course going to be some additional (variable) costs associated even with a scalable business. You’ll need more marketing or sales staff if you are growing and other additional expenses, but it’s not the main cost of each new order.

Tips for a scalable business

Build it into your business model. Make being scalable an essential part of what you do and how you operate. Don’t undertake activity that can’t be scaled even if it seems like additional revenue, if you are not able to scale it, don’t do it.
Decide what your core expertise is and outsource the rest as much as possible, that way you are not restricted on growth. You can also form partnerships with others to allow faster growth.
Automate, automate, automate. Think through the whole sales/supply chain, cheap computing power now days can make business processes for each new order very little additional cost.
Being scalable by itself is not of use unless you can take advantage of it by getting lots of new business. You will need to market yourself as heavily as you can afford. This is where Investor funds can help (if you have a compelling business model and show you know the market). Use indirect marketing to give scalability to your marketing. PR, news items, Facebook/Twitter and brand recognition all have far reaching effects.
Use the web. The most obvious scalable companies are web based social media sites, but even if you are a product orientated business you can get very scalable using the internet. Amazon are a product company, but they outsource their products and sell and fulfil using the web.
If the business is not easily transferred to the web, perhaps because it is a very hands-on service, look at franchising or licensing your product or business model. There are all kinds of businesses successful this way from fast food to grass cutting companies. The example chart on this page is for a Mexican restaurant!

Not every business will want Investment, or to grow large and that is fine, but even those can benefit from looking at the way that scalable businesses make life easier for themselves by automating and using the scalability techniques now available.

The difference between a Business Partner and an Investor

2 Business Partners – Bill Hewlett and Dave Packard

Company Partners provide access to both Business Partners and Investors so what is the difference and when would you have one but not the other?

Certainly an Investor is a business partner of sorts and can bring many of the benefits of a business partner. A Business Partner could in some circumstances end up investing in the business, so here is my take on the similarities and difference:

Business Partner

Hands-on
Brings additional, complementary skills
Sometimes useful contacts
Will share in the profits of the business
Likely to own some share of the business, or be given the opportunity to buy or earn shares
More commitment and “skin in the game” than just an employee
Primarily brought in for their expertise and ability to add value when working in the company

Investor

May be hands-on, but often not.
Skill set frequently is in business planning, finance and strategic direction
Normally valuable contacts are available
Will share in the profits of the business
Injection of funds (to be used to grow the business) in exchange for equity in that business
Doesn’t want to run the company, but will expect involvement in major decisions and report on progress
Primarily brought in to provide funds, advice and contacts

If you need another pair of hands with essential expertise go for a Business Partner, if you primarily require funds and contacts, go for a Investor. Both will provide a sounding board and be able to provide advice.

What is due-diligence and how do I do it?

Due-diligence needs thinking about for Investors when they are about to embark on an investment. However it’s just as applicable for those who are seeking investment to check out a potential Investor. In both cases you should verify that the person, business and facts as stated are correct.

That’s not being mistrustful it’s just being business-like and expected by all parties to a potential funding agreement.

There are several types of due-diligence, not all will necessarily be relevant and this list is not exhaustive, but does illustrate the common areas to consider:

Legal

Are there IP (Intellectual Property) rights involved?
Any pending litigation or disputes?
Legal structure and ownership including share holdings and any restrictions
Regulation or licences that may be necessary for doing business

Financial

Verify financial information provided
Obtain bank accounts and statements
Examination of accounts and underlying performance of business
Details of any property owned by the business, including mortgages

Commercial

The market that the business operates within and its market share
Customers: list of major customers. Is the business dependant on just a few customers? Can you talk to some customers?
Suppliers: list of major suppliers. Is the business dependant on a few suppliers?
Competitors and the unique advantage that this business may have.
Assumptions that lie behind the business plan
Insurances held
Guarantees and terms & conditions of sale that the business gives

Human Resources

Management background check
Key personnel staying / losing
Pension commitments

IT / Systems

Hardware and important software used within the business
State of the systems, are they up-to-date, using appropriate technology
Compatibility to any existing systems if merging businesses

For Investors, where possible always use professional legal and accounting firms who will have a VERY detailed question check list for carrying out due-diligence. For smaller or even start-up businesses it may be that a simple management check and time taken to understand the market and the advantages of the business is enough. That is for you to decide, but you must make sure you do all necessary to verify people and facts.

Both Investors and Business Owners should be aware that due-diligence takes time and can be detrimental for the business when the owner is distracted from normal operating duties by needing to find all the due-diligence documentation required and in answering the questions raised, but it is an essential part of selling or getting investment.

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