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07/01/2016

Life after debt in 2016?

By Nicola Griffiths, Portfolio Executive

You’re the owner of an established Welsh small or medium-sized business (SMEs), but what does 2016 hold for you?

Are you happy with your business’ current revenues and profits or will 2016 be the year your business steps up a gear?

If you are looking for faster growth in 2016, you might need to think differently about funding. What are your options if your business doesn’t have enough money in the bank to finance your plans? 

Well, if you’ve grown your business from the ground up, you may think of taking out a loan as you’ve done in the past, but will a loan really give you the flexibility you now need?

Considering equity

Alternatively, if you can demonstrate a capable and ambitious management team, you operate in a stable market and are poised for growth then private equity may be a viable funding solution to boost your business in 2016 and beyond.

An equity investor can work with you to help focus your long-term goals and develop and implement a plan to achieve them.  They’ll also be able to help you to think about:

1.) Developing your strategy

By working out what needs to be put in place to achieve competitive advantage.  They’ll be able to help you recruit key staff, perhaps to boost your management team, or introduce you to trusted experts in your industry.

2.) Shaping your board

You’ll be able to benefit from their network of experienced professionals to strengthen your board and ensure you benefit from the right guidance when it comes to making decisions about important ‘growth issues’ like governance and scaling up business models.

3.) Funding

As you expand you’re likely to need additional funding, perhaps as you enter new markets, ramp up production or you need to employ more staff.  A long-term equity backer will be able to consider follow-on investment rounds and also introduce you to its co-investor network depending on your total funding requirements.

4.) Exit planning

What are your long-term personal financial goals and how will you know when the time has come for you to sell up?  Your backer should help you clarify these goals and ensure both you, your managers and staff all benefit from the hard work you’ve all put into your business over the years.

Make 2016 your year for growth

So, if your business is to take the leap from lifestyle to growth business in 2016, carefully considering your funding options can set it on the road to even greater success. Equity investment could not only provide you with the funding you need, but also see you benefit from a wealth of valuable expertise and experience.

And for you, the person who set up the business and has stuck with it through thick and thin, it could also have a big impact on the rewards you reap for years of hard work.

Finance Wales offers equity investment to Welsh SMEs at all growth stages. If you think your business could benefit from an equity investment contact us today and speak to one of our equity investment experts.