Business Growth SpecialistI've returned to Australia after an international career. Most recently, I was Finance Director in Europe for a unit of the world's largest Lighting company. I've played a key role in turning around two businesses which were suffering from strategic blunders, poorly executed change, disconnection from the market and rising Chinese competition. Three years later, they were both star performers. I'm helping SMEs grow in two ways Operational and Finance Consulting
Raising Fast, Cheap Equity Finance
Operational financial management Managing complex businesses is tricky, and good finance skills make a huge contribution to increasing value. Either by increasing profits, making good investments, or understanding how valuation models work (if you are looking to sell your business, or raise finance from it) | Don't get lost in the details | If you get lost in the details, you'll suffer paralysis from analysis, and this is why business leaders are dismissive of "bean counters". A good finance person can look into the complexity of a business, with its suppliers, its customers and its products, and find the key numbers that drive the business. Focus on the key things makes aligning a management team easier. Budgeting and forecasting becomes simpler and faster. Responding to tenders is faster. Deviations are noticed more quickly, and strategic choices become clearer. | | Risks of simplicity | Simplicity has risks. Simplicity is based on a model, but the model could be wrong or the reality could change. A good finance person can never forget the assumptions behind the business model, and they must be able to quickly dive deep. | | Finance and IT | Switching from summary to details is why modern finance people gravitate to IT. The processes and the data and the systems are tools that allow fast, simple views of the business, and which can support a drill down into the details. | | People are the best system | Information systems can be seductive. Really good finance people know that the number one information system in a company is people. They've always known that: it's the heritage of an internal control focus | | Ownership | A good finance person wants ownership in the business, and this means they need to lead change management, and put together cross functional teams. They need to have the operational experience to win credibility with sales, marketing, supply chain and development. |
So it's clear why I entered Finance in the late 1990s. I like understand what makes things work, I like turning masses of data into information, and I am fascinated by organisations and making them better.
Raising cash for growth using equity financeIf you are a founder of a potential high-growth business, you need to know about raising equity capital. - raising equity capital will minimise your personal risk: founders don't provide personal guarantees (eg, mortgage on their house)
- no interest payments, unlike a loan
However, investors need to know that their money is driving growth, and that they can cash-in in the next three to four years. One source of equity capital, venture capital, bundles it all together. You get the money, a new high-power management team, and a new controlling shareholder. The Australian Small Scale Offerings board offers an alternative. Suitable SMEs can get the money they need while the founders keep a majority share. However, the investment offer needs to cover the following: - Barriers to entry: an investor want to know that you can turn your idea into growth, not simply find a path for others to follow
- A plan clearly showing how you will grow with investors' money ("use of funds")
- The plan needs to show more than the development of your product. You need to show the route to market: how you find customers, and how you sell to them
- A highly credible Board of Directors: credibility, experience, a track-record: this is crucial
Equity raising is the best way to get the money to grow, but until recently it was difficult for small businesses to get access to it. And if they did, it was often via venture capital which took a controlling and dominant interest in the company.
That has now changed, mainly due to the Australian Small Scale Offerings Board (ASSOB). You can raise funds and keep control of your business. I have experience of winning millions of dollars of investments. I am an expert in building credible plans, and I know what wins the pitch. You also need expert advice in setting up the right company structure, and in navigating the Corporations Act, which regulates "security raising" in Australia. Additionally, you probably need to strengthen the Board (which is almost the biggest single contribution to successful fund-raising you can make). These are areas of special expertise. I can offer this to clients by working within the network of Corporate Outcomes. |