Ways to improve chances of funding success (Part 2)

May 3, 2011 § Leave a comment

I asked this question to a range of entrepreneurial Scottish businesses – these are some of the answers. Thanks to all the contributors.

Becky Woodhouse, PURE Spa

  • Cash is king so make sure that your cash flow forecasts are up to date and as accurate as they can be – this will also ensure that you can forecast any potential shortfalls and take action before they grow into a problem
  •  Don’t take no for an answer!  If you are confident in your proposal, don’t give up, and seek out feedback if you have been unsuccessful so you can identify the areas you need to improve to make your proposal a success

 

Ben Panter, Blackford Analysis

  • Understand the customer and end-user
  •  Appreciate that these might be different people

 

Carol-Ann Searles, Carlyle Associates

  • Research and road test funding proposition before approaching funders to try to get a right first time approach
  •  Use your network as funding may come from unexpected sources

 

Dr Tim Willis, CEO & Founder, Flexpansion

  • Answer the questions as fully as possible on forms for public funding especially – back up your statements as much as possible with external sources, market research etc.
  •  A bit obvious, but do as much preparation as you can for pitches.
  • Practice as many times as possible and be prepared for as many questions as you can.  If you don’t know, just say so as it validates the answers you are able to give.  And make a note to find out the missing answers.

 

Alex McAndrew, Spinsight

  • Sell something, anything!

 

Colin Gilchrist, Digital Face

  • Get on Linkedin and look for Equity Partners – consider their background and whether they are a natural fit – don’t approach just anyone with cash
  •  When pitching you have 10minutes to get their buy-in, practice, practice, practice – if you have slides limit it to 10 – if you don’t have them by then it will be a huge uphill struggle. 
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Ways to improve chances of funding success (Part 1)

April 26, 2011 § Leave a comment

I asked this question to a range of entrepreneurial Scottish businesses – these are some of the answers. Thanks to all the contributors.

Brian Hughes Halferty – Kiltr.com

  • Get a referral
  • Try to be prepared for every question – VC’s are very smart people, if you don’t have an answer, say so and then go find one and get back to them ASAP. 

 

Hugh Ilyine, DestiNA Genomics

  • Learning to be a ‘little bit audacious’ in order to be noticed
  • Clarity of message focused on the market opportunities and success to date with users/purchasers of the technology

 

 Donald Cameron – EQSN

  • Scalable business model
  •  Early customers that endorse your service and reduce the risk

 

Alexander Cole – Peekabu Studios

  • Have a real-world case study for your business. Even if they can’t imagine themselves as the customer, make that hypothetical customer someone they can relate to, and tell the story of why they need your product and how they’ll pay. The narrative is crucial: they might understand three words of the underlying technology, but if they can see a clear line drawn between the product and the profit, that’s all they’ll need.
  • Never undersell yourself. If the idea is big, believe in that, and sell that belief. Modesty has its place, but not in your financial projections.

 

Billy Stenhouse – Baguette Express

  • Have a good business plan.
  •  Be prepared to show your willingness to back yourself or banks will not lend.

 

Richard Burton – Hood Easy

  • Get to early profitability if possible
  • Put all your own assets in first

Things I wish I’d known before I started (part 2)

April 19, 2011 § Leave a comment

I asked this question to a range of entrepreneurial Scottish businesses – these are some of the answers. Thanks to all the contributors.

Becky Woodhouse, PURE Spa

  • The amount of work/disruption to your life in starting a business – I didn’t take a holiday for the first 4 years!
  •  Not every one you deal with are professional or honest and you need to be prepared for this and fight your corner if necessary

 

Ben Panter, Blackford Analysis

  • Customers are interested in products which solve their problems, not technologies.
  •  Every time you have a conversation know what outcomes you would like before you begin.

 

Carol-Ann Searles, Carlyle Associates

  • Many people start their own business for flexibility of lifestyle, if you are trying to grow a business it takes a lot longer than you think to get flexibility!
  •  You need to be an MF, FD, Sales Director, IT Director and cleaner!

 

Dr Tim Willis, CEO & Founder, Flexpansion

  • How long it takes getting a program built when there’s a large element of research involved as well as development.  I spent a lot of money early on with ‘cheap’ non-professional programmers trying to fix the unfixable versions others had tried to build.  I wish I’d cut that process earlier and got people rebuilding from scratch (as eventually happened) sooner. Unfortunately early on you have no money and the only way to get a prototype if you’re not a programmer yourself is to pay non-experts, and trust their judgements.  It might have been cheaper to take a year off and learn how to do it myself, but the nature of a lot of funding is that you can pay others to program but not spend that money on supporting yourself while *you* learn to do it.
  •  How long it takes to get funding – I spend most of my time with the R&D on pause while I chase more money to keep a roof over our heads and to pay the developers to do another chunk.

 

Alex McAndrew, Spinsight

  • Weekends are a luxury.
  •  Trust your instincts, particularly the negative ones.

 

Colin Gilchrist, Digital Face

  • It’s all about cash flow – payment or part payment upfront
  • If you admire a particular business or person the chances are if you speak to them they’ll listen and help.

Things I wish I’d known before I started (part 1)

April 12, 2011 § Leave a comment

I asked this question to a range of entrepreneurial Scottish businesses – these are some of the answers. Thanks to all the contributors.

Brian Hughes Halferty – Kiltr.com

  • Design v engineering takes a lot more planning/time than we first imagined
  •  You’ll very rarely see your family, so enjoy every minute before you start

 

Hugh Ilyine, DestiNA Genomics

  • The relative risk being taken in investing time and money into the start-up, and the time needed to develop the business  and market understandings for novel technology.
  •  The challenge to describe a complex technology platform in simple terms, yet develop this into a comprehensive Business Plan

 

 Donald Cameron – EQSN

  • How long it takes to establish a ‘brand’
  •  Picking your partners is like getting married

 

Alexander Cole – Peekabu Studios

  • Technology is great, but a business is about practical, saleable applications. Investors and clients not in your field won’t follow you for just an idea, they’ll follow you for a workable model and a product you can sell. 
  •   Bureaucracy takes time – anything involving paperwork, filing or money will take four times as long as you expect or want it to. If you don’t plan for this, your technology can go public before your patent is filed, and you’ll scuttle the whole thing.

 

Billy Stenhouse – Baguette Express

  • How much money I needed to make the business successful.
  •  How awkward banks are when you have a vision but they don’t.

 

Richard Burton – Hoodeasy.com

  • Never use verbal agreements
  • A rollercoaster of highs and lows is way more fun than a flatline existence.

All discounted out

April 12, 2011 § Leave a comment

Groupon was a fantastic success story of 2010 and the anticipated IPO may well be a highlight of 2011.

The business is by all accounts tremendously profitable and clearly has a great business model.

But…, as a subscriber the Edinburgh daily deals email stream, I was struck by the feeling that it was overwhelmed by health and beauty deals, and as such, somewhat less valueable to me than I had anticpated.

Being an accountant, I decided to put some numbers on this. During the three months to December, I received 73 emails from Groupon. 52 of those (71%) related to offers in the Health and Beauty sector.

What did I take from this?

– Daily deal sites need to work at broadening the types of offer in order to maintain user interest/longevity

– There is an opportunity for niche daily deal sites to emerge (SecretEscapes.com)

Discount vouchers are increasingly used to generate sales (I can’t remember the last time I ate at Pizza Express full price!), but the businesses need to protect the perception of value, and constantly offering discounts definitely diminishes that.

Opening…

April 1, 2011 § Leave a comment

A short post to say that my blog is now live.

Posts will follow on a range of topics – mainly business related.

Hopefully a useful contribution to the mass of information already available…

Planning to post regularly – around 2 times a month.

Toby

Secret sauce for business success…

December 7, 2010 § Leave a comment

I recently read a book (Founders at Work, Jessica Livingston) about the early days of some well known web based businesses such as Blogger, PayPal, 37 Signals, Hotmail and Craigslist.

There were some interesting and consistent themes around the stories of success.

  1. Luck – in the right sector at right time
  2. The problem being solved was often satisfying personal need
  3. Founders recruited a quality team
  4. They had existing knowledge of sector
  5. Surprisingly, there was not a strong profit motive

There is no shortage of guidance on how to succeed, but these areas might provide some indicators.