4th August 2005
Seeking investment? - 'Think of it as a first date!'

Business people seeking investment support have been told by an expert advisor that their personal credibility and trustworthiness are paramount in impressing potential lenders.

"Think of it as going out on a first date - give your business a bath, get its hair cut and brush its teeth!" said Ewan McClymont, business development manager for the Truro and Plymouth offices of the South West-based chartered accountants Bishop Fleming.

"When you are making yourself 'investment ready,' you are in the business of making yourself attractive to lenders or grant providers," he said. "Banks, lenders and grant bodies don't invest in the business - they invest in you.

"Your job is to convince them that you are capable of delivering what you promise to do. Your credibility is paramount, as is that of your management team."

Addressing business club members of the South West Investment Group (SWIG), Mr McClymont stressed: "They are looking for honesty and transparency. They need to trust you with their investment. Will you deliver what you promise?"

To become "investment ready", explained Mr McClymont, it was essential to get your house in order, with up to date management information, to carry out market research, seek professional advice and be clear on how much a project was going to cost.

Another "must" was a business plan. "This is like a road map," he said. "Where are you today? Where do you want to get to? How will you get there?"

He quoted Dwight Eisenhower as saying: "Planning is everything; the plan is nothing." Mr McClymont commented: "The business plan is not something that you park on the shelf or prop the door open with. It is a living document and, as Eisenhower found out, plans change. So get used to revisiting and revising that plan."

A prospective lender, he explained, wanted to be convinced that a plan made sense and was right for a business and that monthly repayments for funding support could be met without putting a strain on the organization.

A lender would also want to know the risks involved and a company's ability to meet "what if" scenarios.

"They are looking for you to share the pain if it all goes wrong," warned Mr McClymont. "If you want to borrow £100,000 but are only proposing to invest £10,000 of your own money, don't expect a warm reception unless you are willing to sign personal guarantees or give a charge on your assets."

John Peters of South West Investment Group commented: "A safe pair of hands was vital - generally banks are not in the risk businesses. Gap fund lenders such as SWIG will take more of a risk, but still expect to get repaid."

Mr McClymont was addressing a gathering of over twenty SWIG Business Club members at the Carlton Hotel in Truro. The club, called 'Learning Networks' is open to all businesses funded by SWIG and meets once a month in Cornwall and in Devon.