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Sometimes you need to think big, then even bigger…. 26 May, 2008

Posted by varoom in Business Plans, Investment propositions.
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I review many business plans in my high tech business mentoring roles and often I see entrepreneurs believing that if they are prudent, conservative or cautious about their business goals investors will look favourably on their propositions. They believe this caution will reflect positively on them and their business.

In many cases the opposite is true. The investor often is looking for opportunities for even greater growth and if increased funding can make the business grow even bigger or faster then they can be very interested. However you must be careful not to take on too much funding so that you cannot deploy all the funds and part with too great and equity at such and early stage. This will be a balancing act. But if your business will benefit from such increased funding then it should be considered seriously.

It falls upon the entrepreneur to fully comprehend the outer boundaries of the potential of the business, what are the key critical paths, how big could the business be, could it utilise extra funds, earlier, to gain bigger market share, get to market earlier to exploit higher prices, to develop more products or enter more markets.

Now, this still means you must be realistic, have rational analyses of various cases of funding, good project plans, resources, market forecasts etc. You must be prepared for the question, “If I doubled the money what would it do to your business?” as this can be a common question. Not knowing enough about your business prospects with increased funding will damage even a modest funding request.

In summary, think bigger, stretch your proposal, and consider carefully the scenario of greater funding, what it will do for you and what it could gain a potential investor. You might be pleasantly surprised.

Grev Commins