Money makes the world go round, as they say. However, searching for investment to fund a recent company formation or grow an existing business in the current economic climate could be perceived as futile. Yet if your business needs additional income to grow, or indeed survive, and you are not quite ready to give up, what should you do? In this post we give you some practical advice on how to gain finance in a recession.
Business analyst Mark McEwen believes that there is still investment available; it is just how you go about getting it that has changed. “Companies are still being formed and funded. In the context of financial instability, investors are apprehensive about putting their money into banks. However, it is vital that a recent company formation or established business both know what investors are now looking for and that this knowledge informs their planning and pitch process” states McEwen.
Don’t Ignore It!
You know we are in a recession, I know we are in a recession and your investors certainly do, so why choose to ignore it in your business plan or pitch? “Forming a company in an economic downturn is risky” says McEwen, “Failing to identify that risk in a business plan or pitch is a big mistake. Investors want to hear how you plan to operate in the current economic climate. Focus your business plan or pitch around how you plan to strategically take advantage of the recession, using it as an impetus for your company’s future growth and development.”
Look at your Current Business Model
For most recent company formations the main objective is gaining market share. However, while potential investors are interested in this as a long-term strategy, what they really want to know is how you plan to maximise your existing profitability. McEwen suggests that entrepreneurs think carefully about how they plan to use the additional investment for maximum ROI. Investors want to be confident that they will be getting the most out of their cash.