Would you invest in your own business?

Would you invest in your own business?

Would you invest in your own business? 1920 960 Visible Pathway
Author: Chris Rodowicz |  Reading Time: 6 minutes

Visible Pathway recently hosted an online event, Would you invest in your own business? with special guest speaker, Brigitte Lawler.

Brigitte is the founder of LEGEND, a business working internationally with tech start-ups to take their innovative product to commercial success. We understand that having a good solution is not enough to run a successful business, so we work with our clients to get their product to market, to run operations and attract the investment needed to realise their growth plans.

Brigitte and our CEO, Mark Cotgrove discussed: If you were in the shoes of an investor looking at your business, how likely would you be to invest?

Would you invest in your business? Chat between Brigitte Lawler and Mark Cotgrove

To watch the full session on demand, click here.

Below is a summary from some of the questions asked by our guests:

Question 1 from Aaron: Can you offer any advice to busy company founders that are challenged in finding the time to concentrate on the business?

Mark & Brigitte: Ensure you are organised. Manage it like a sales process and make sure you know what the ideal process is. Make sure you have all of the assets (biz and financial plan, relevant docs etc etc.) ready to go before you start the process, this will speed things up as you progress. If you aren’t sure, (which most of us aren’t as we haven’t much/any experience in this) then seek external help. Give a certain amount of time per day to moving the process along and then get on with BAU in the rest of your day. Good luck with it!

Question 2 from Prabhir: When should a company should go for fundraising? Let’s say if your bootstraps is working great, is there a time when should seek funding? Let’s say the plan of scaling is being managed as per the plan now.

Mark & Brigitte: Not all companies need external funding! If the business is going as you hope/expect at the moment why do you need external funding at all? Any funding request should have a clear purpose for use of funds. Remember, as soon as you have an external investor you are, to an extent, dancing to someone else’s tune now and that might be different from your own as things progress. Getting your investor match right helps to mitigate this issue but nonetheless it’s a real one. To decide whether you really need external investment build a full, detailed financial plan and once built you can play with different scenarios to see what’s required. Think about what the different possibilities for the business are and model each one in your financial plan to see what external investment is required. Once you’ve decided on the route you want to go, use the financial plan to decide the amount, type and timetable of an investment plan. If this isn’t clear to you then seek external help, you’ll probably find our Project “Get Fit for Investment” very useful. Good luck!

Question 3 from Ben: Can you share more examples of business models?

Mark & Brigitte Think of the business model as the mechanics of how your business machine actually works. You can’t therefore say there is model A model B and so on. Think about how do you make your product, who do you sell it to, how do you sell it, the pricing model, the channel strategy, partner strategy etc. They key is that all of these different parts work well for the customer of each part of the business.

The easiest one to think about is usually product: if your customer could wave a magic wand, how would they want to engage, buy and use your product? Your company’s response to all of these questions should match the customer’s wish list as closely as possible. If you force the customer to do things away from their ideal you’re putting barriers in the way of their purchase/usage.

However there’s a big caveat to what I’ve just said: it presupposes that your business is built on product differentiation. You can absolutely build a successful business on business model differentiation. In this case your thinking needs to be about how you are going to offer your product to a customer with a different way of doing it wrt to the incumbents that is advantageous to the customer but they probably haven’t thought about yet. A simple example might be a widget business where everybody sells their products. What if you came along and offered the widget for free but with the stipulation that the customer needs to buy a service contract. That contract offers maintenance, upgrades etc over the life of the product. The advantage to the customer is lower up-front costs and a fixed lifetime cost. This could be competitively advantageous but requires a totally different cost, delivery and therefore finance model to support it.

This same thinking should apply to all of the other parts of this business and your business ‘design’,’ its ‘business model’ should match each part of its value chain as possible.

The final thing to say is obvious but surprisingly missed sometimes: the business model must allow a profitable operation. You could think about some well-known businesses that arguably, although massively valued companies, their business model actually doesn’t allow them to make a profit when they charge what customer are willing to pay, think of ride hailing companies like Uber and Lyft, let’s see!

To learn more about how to get your business investment ready go to Get Fit for Investment, the digital project for businesses seeking investment. It contains a guided, easy to follow approach for attracting the right funding from the right investor for your business. You can try it for free, no obligation, no CC required.