When it’s time to expand your business that often means raising capital to make it possible, but raising finance for a retail business isn’t easy.
The investors you’re asking to fund your business need to understand your product and business potential. Pitching for investment is a strenuous task but investors can provide you with invaluable wisdom and help your retail business gain recognition and credibility, and most importantly provide the cash you need to make your business successful.
But how do you go about raising finance? Gina Nigrelli, the founder of successful fashion brand Jules Smith and a customer of Brightpearl, recently secured funding with CircleUp with the help of Stage 1 Financial (specialists in Fully Outsourced Accounting and Finance for Growing Consumer Brands).
So we got them together to share their experiences on a live webinar panel discussion, Gina, Jeremy Triefenbach from Stage 1 Financial, and Ben Lee from CircleUp shared great insight into how to be successful in raising finance for your retail business.
In 45 minutes the following four key areas were discussed and here’s some sneak peeks of what was covered:
What do investors want?
There’s a lot of different things investors look for when they invest. Finding your differentiator is always a good way to catch an investor’s eye, what makes your business stand out from the crowd for them to take notice? Of course investors are looking for a return on their investment so they’ll be looking at your numbers but if you can show entrepreneurial passion, proof of concept, and a strong business strategy you can secure investment.
Ben Lee, Director at CircleUp, the leader in marketplace investment and working with growing consumer brands said:
“A lot of it depends on what type of investor you’re going after. If it’s a professional investor and investment is their day-to-day business, they'll be looking for additional proof points e.g. additional revenue, distribution into certain retailers, purchase orders etc.. Alternatively there are investors out there who get super excited about getting invested in a business really early, although there’s probably a much smaller universe of investors like that out there, they are looking for whether they really believe in the entrepreneur and the product.”
Watch the full video to hear more.
What to include in your investment proposal?
You’ve decided you need external funding to grow your business, the first thing you need to be thinking about is the information you’ll need to include in your investment proposal. Is that data easy to get to right now? By implementing integrated accounting software or a retail management system you’re putting the foundations in place for your business’ continued success, and giving yourself that edge. You’ll have access to real time financial data, your balance sheet, and you’ll be able to create financial forecasts from one system. It’s a much better way to manage and maintain your business information, giving you the confidence to pitch to investors successfully.
In addition to the investor point of view on this webinar, we were also joined by Jeremy Triefenbach from Stage 1 Financial. Jeremy works with lots of entrepreneurs and fast growing companies to help them secure financial investment.
“The first thing is to develop all the materials an investor is going to look at. What is at the heart of your brand which you’re trying to communicate? And make sure you’re confident in your numbers!”
The Fundraising Process
Every entrepreneur is different. Gina came to the realization she wanted to raise funding for her business when the demand for Jules Smith was so overwhelming the business couldn’t keep up.
“Going through the fundraising process was extremely grueling, it isn’t easy, but it's also extremely rewarding. You learn so much about your business and you become so much better at everything you do.”
Watch the ‘Financing your business for growth’ webinar recording to hear more great advice from Gina, Jeremy and Ben.
Is your investor helping you grow your business or are they impeding you running your business successfully? A lot of investors can bring experience, expertise and business connections to help grow your business. It’s good to get an understanding before you go into your agreement of what skills your investors can bring or how much involvement they want (or you need) to have in your business.
Managing investors can be tricky but as long as you’re honest and remind them that they trusted your vision in the first place you’re more likely to make progress together. Transparency is a must, providing regular updates shows that you respect them and gives them insight into what's happening with their investment. Routine updates help build that line of communication that can help to solve any problems which can arise in business relationships.
To get more great advice and tips from our expert panel on raising finance for your business get the full recording here.
“The panel provided some terrific insight, recommendations and actionable feedback. I look forward to staying in touch.”
- Dave Wagner, Love Your Body Boutique