Welsh SMEs offered top tips to attract growth investment
Welsh SMEs are getting access to up to £5 million in vital growth funding thanks to the launch of the UK’s first development bank.
The Development Bank of Wales, which has been launched by the Welsh Government, will provide essential funding streams to support business growth among SMEs, start ups, and micro-businesses.
Through the new venture companies will be offered a range of investment options from equity for established business and newly-launched companies, to property development funding, and co-investment.
Giles Thorley, who will head up the development bank, hailed it as “a significant step change in the way Government-backed funding is delivered in Wales”.
While this will create a wealth of opportunities for many growing businesses in Wales, others may still be looking to seek investment for their growing venture.
In a bid to support SMEs and start ups looking to attract vital funding sources, our expert Elliott Davies has offered top tips to budding businesses.
Find the right team
Investors will be analysing whether the business has employed the right people to drive growth, as they will be looking to make a return on their investment. As such, searching for the most suitable staff, who have a shared ethos, business focus, and vision for the company’s future is key. Being able to demonstrate a robust management structure is essential to reinforcing investor confidence. A professional and informed management team can steer the businesses in a successful direction, exude expertise, and demonstrate confidence in decision making.
Protecting intellectual property
Many SMEs and start-ups exploring investment opportunities to support the development of innovative products, are far more attractive to lenders if they have secured intellectual property protection. Putting an effective, strategic IP plan in place demonstrates the business’s clear intentions and commitment to the product. It also provides potential investors with the assurance that the product is suitably ring-fenced from competitors, which could ultimately lead to an increase of marketability and profitability.
Thorough business auditing
Transparency and honesty are key when approaching investors. While discussing achievements, significant growth potential, and marketability is essential, investors also need to be aware of any previous negative aspects of the business. Related debts, mismanaged funding, or customer dissatisfaction should also be discussed in order to give the investor a clear picture of the business they are supporting. This also demonstrates the business’s ability to recognise its flaws and accept constructive criticism. By accepting previous errors and learning from these, the businesses demonstrates its ability to grow and enhance its service.
Plan ahead
Considering the long-term future of the business and its aims when creating an investment plan, shows clear focus and financial awareness. Budgeting and growth figures need to be as accurate as possible, rather than estimated, to reinforce the businesses commitment to long-term planning. Providing current or recent figures is also vital, as the business could appear evasive, and could show a lack of confidence in its financial status, if older information is used.
