One day a group of young people came to Dr. Conwell and asked him if he’d be willing to instruct them in college courses. They all wanted a college education but lacked the money to pay for it. He told them to let him think about it and comeback in a few days. After they left, an idea began to form in Dr. Conwells’ mind.  He asked himself, “why couldn’t there be a fine college for poor but deserving young people?”, and before very long, the idea consumed him. “Why not indeed?” It was a project of total dedication – complete commitment. And almost single-handedly Dr. Conwell raised several million dollars with which he founded TEMPLE UNIVERSITY which today, is one of the USA’s leading schools.

He raised the money by giving more than 6,000 lectures all over the country. And in each one of them he told a story called, “ACRES OF DIAMONDS”. It was a true story, which affected him very deeply, and it had the same affect on his audiences. The money he needed to build the colleges came pouring in. The story was the account of a farmer who heard tales about other farmers who made millions by discovering diamond mines. These tales so excited the farmer that he could hardly wait to sell his farm and go prospecting for diamonds himself. So he sold his farm and spent the rest of his life wandering the continent searching unsuccessfully for the gleaming gems which brought such high princes on the markets of the world. Finally, the story goes, worn-out and in affinitive despondency he threw himself into a river and drowned.

Meanwhile, the man who had bought his farm happened to be crossing the small stream on his property when suddenly, there was a bright flash of blue and red light from the stream creek bottom. He bent down, picked up the stone, it was a good size stone& admiring it, later put it on his fireplace mantle as an interesting curiosity. Several weeks later a visitor picked-up the stone, looked closely at it, hefted it in his hand and nearly fainted. He asked the farmer if he knew what he had found. Why the farmer said no, that he thought it was a piece of crystal. The visitor told him that he had found one of the largest diamonds ever discovered. Well, the farmer had trouble believing that. He told the man that the creek was full of such stones not as large perhaps as the one on the mantle but well they were sprinkled generously throughout the creek bottom. Needless to say, the farm the first farmer had sold, so that he might find a diamond mine, turned out to be the most productive mine on the entire African Continent. The first farmer had owned, free and clear, acres of diamonds but had sold them for practically nothing in order to look for them elsewhere. The moral is clear, if the first farmer had only taken the time to study and prepare himself, to learn what diamonds looked like in their rough state and to thoroughly explore the property he had, before looking elsewhere, all of his wildest dreams, would have come true.

Now the thing about this story that so profoundly affected Dr. Conwell and subsequently millions of others, was the “idea” that each of us is at this moment, standing in the middle of his or her own acre of diamonds. If we’ll only have the wisdom, and patience, to intelligently and effectively explore, the work in which we are now engaged, to explore ourselves, we’ll usually find the riches we seek. Whether they be financial or intangible or both. Before we go running off to what we think are greener pastures let’s make sure that our own isn’t just as green but perhaps even greener. It’s been said that if the another pasture appears to be greener than ours, it’s quite possible that it’s getting better care…

You can download an RTF copy here Acres of Diamonds rtf

Download a PDF copy here Acres of Diamonds

That being said, there is often plenty of speculation on the part of the entrepreneur about the worth of including a financial forecast in their business plan. This scepticism generally stems from the question of accuracy, or to be more precise the question of how accurate the financial forecasts of a new venture could possibly be and whether or not these semi-guessed estimations are truly relevant and worth the effort.

It must also be said that the confusion about the importance of financial forecasts is not always solely due to conjecture about its worth; those who are not necessarily financially-minded may simply be confounded by how and why to include something that some might deem to be little more than guesswork.

However, while the numbers in your business plan may be estimated and assumed, they certainly are not simply guessed at or made up. They need to be well considered, researched and justifiable so that they will stand up to any reasonable scrutiny. And, if it just so happens that your current forecast really is comprised of a bunch of made up numbers, you might want to rectify this before submitting your plan to potential funding sources.

Keep in mind that your potential investors will use your business plan as their primary tool in weighing up the risk of investing in your company. You want to ensure that you look good on paper, but you also want to make sure that your figures are as accurate as possible. Now, when it comes to a financial forecast accuracy is decidedly relative, but you absolutely must be able to support your estimations, and your numbers must be able to stand up to questioning. When you accomplish this, you will be in a solid position to win confidence, win finance and start down the road to success.

The financial projections in this section should include a profit and loss forecast, cash flow statements and a sales forecast. Investors know that many entrepreneurs and new business owners will overestimate their sales potential which is why they often ask numerous searching questions to establish the validity of the figures – they will then take these answers into account when reviewing a business plan.

Now, while optimism is clearly one of the things that have gotten you where you are today, your potential funders will need to see that you also have a realistic streak. A good rule of thumb is to include three sets of figures within the forecast in your business plan. The first showing an optimistic view of your sales, the second a realistic view and the third a slightly more pessimistic view. This kind of honesty and acknowledgement of real life potential issues can go a long way to winning the trust of your potential investors.

Most importantly, you need a business plan that has an accurately estimated financial forecast where every figure is qualified, that you fully understand and that can be shown to potential funders. Whether you are presenting your investment opportunity face to face with your bank manager or in a pitch to potential investors, they will always have to answer questions about your expected turnover and profits. All too often entrepreneurs flounder over the difference between net and gross, turnover and profit, or simply knowing their figures. Excuses like, “I didn’t prepare this, my accountant did” or, “I’m an ideas person not a finance guru,” will not cut it in these meetings where they expect any entrepreneur to be able to multi-task at least to the extent of understanding and being able to justify the figures in their business plan.

If you have been on the fence about whether or not to include a financial forecast in your business plan, it’s time to climb on down to the side that knows just how important these documents really are. Besides, this side of the fence is where all of your potential investors are standing and, if they are considering investing in your company, they will be delighted that you have decided to join the party.

This article was first published on 1 July, 2010 under the title, ‘Show Me The Money’.  http://blog.angelsden.co.uk/index.php/2010/07/show-me-the-money/

Angel Investment Business Seminar in Qatar

So you have got a great idea and want to make a successful business of it?

You may feel that your product or idea will be sufficient in obtaining Angel Investment, however, the reality can be somewhat different.

Seeking funding for a new business venture can be a difficult and time-consuming process. However, there are a few tips that may help to make the process easier and more productive.

The Business Plan

Firstly, and most importantly, you need to have a well thought out and thorough business plan. As the first source of information for potential funding, the business plan is crucial in getting initial attention and interest from the Angel Investors. It needs to clearly reflect your vision and goals for the business, how the money invested is going to be spent, as well as how it will benefit the business and its potential funding providers. This gives you the opportunity to highlight your management ability and financial forecasts.

The Pitch

The pitch is also extremely important as it can make or break your chances of receiving funding – remember first impressions do count. Practicing the pitch is essential as you need to be prepared to answer the possible concerns investors may have, whilst providing a concise and engaging summary that doesn’t give away all ideas. It also needs to steer away from all jargon. Stick to what you know!

Even though Dragon’s Den may be a fabricated event created for a television audience, and more about entertainment than the true process of Angel Investment, there is a degree of similarity. Professional Angel Investors who are active with Angels Den tend to more laid-back so don’t expect such a grilling. Also don’t forget there won’t be a TV crew there whilst you’re pitching for Angel Investment.

Be Yourself

Angel Investors want you to be yourself. Whilst they know you are passionate about your business, it is more important that you are rational and realistic with your company’s financial and sales forecasts. No one wants to work with someone who isn’t grounded.

It’s All About The Detail

You need to be able to professionally present credible and detailed information relating to the current and potential capital, financial forecast, cash flow forecast, as well as how investments will be managed and what involvement there will be. Investors will want to know what sales you have already made so they can interpret the business’ potential.

How Much Of The Business Are You Offering?

Not only do you have to be realistic in terms of your financial forecasts, but also in what percentage of the share capital you are offering for your desired investment sum.

If you are offering 30% for £100,000,  is your business really worth £333,333? Can you back it up with figures?

What Purpose Are You Seeking Angel Investment?

It is also crucial that you know exactly what you want the funding is going towards and why your business needs funding? Are you using Angels to gain greater coverage in terms of their contacts and networking or maybe for their expertise in the field you are entering in to? Investors prefer to know up-front why you have chosen them and let’s face it, they don’t want to hear it’s just to use them for their money!

Are You Prepared To Be More Indebted?

You will need to be up-front regarding the company’s financial status and what levels of debt you have tied-in to the organisation.

Releasing Some Control

Are you actually prepared to have others having a say in how the business is run? Angel Investors tend to have decades of experience in business, and with their own money often being invested, would you be willing to work with an Angel Investor who has a degree of say of how the business in run?

Is Your Idea Original?

Another major factor that you need to take into account is that whether the design of your product or idea is original, has patents and importantly that you own the original design?

Angels prefer to protect their investments. Having a patent can make or break a deal. If patents aren’t present there is often no reason why other companies can not take your business idea and produce the product themselves. This would reduce the value of the Angel’s investment.

Be Aware Of Your Competition

Are you realistic about your competition? You would need to consider how they will react when you launch and market your products. Will they try and keep you out of the industry by lowering their prices, will they increase their marketing spend, or will they launch new products? The market won’t be static in the face of you entering it.

Are Angel Investors The Last Option?

Potential investors will also want to know whether you have approached any other type of funding before them and why you have chosen this method, particularly if you think your idea is so groundbreaking. They need to know why the venture is appropriate for the type of external investment they are involved with.

Angels will also wish to know if you or your family can’t provide the funds yourselves.

There Is No “I” In Team

Angel Investors also like to see that you have a team behind you that are committed and determined to make your business a success. Angels not only invest in the idea, but also the people.

If you have found the information useful then you can register as an entrepreneur here.

This article was first published on 26 August, 2008.  http://blog.angelsden.co.uk/index.php/2008/08/twelve-things-to-think-about-before-seeking-new-business-funding/

How to make the right connection in Qatar

Pitching for Angel finance rule #1—Be yourself
When pursuing Angel finance, be yourself. Don’t try too hard—the prospective investor is likely to see right through you. Remember, these wealthy individuals got to where they are today because they’re savvy entrepreneurs used to sifting out the truth. They won’t be impressed if they discover that you’re putting on an act to impress them—and they will be able to tell. Besides, nobody likes a kiss-up.

It’s only natural to want to do well in what could possibly be the most important meeting of your business life, but presenting a persona invented for your Angel finance pitch in the belief that it will show an investor what they want is a bad strategy. So if you’re not funny, don’t try to crack jokes when pitching for Angel finance—and if you’re not naturally sombre, don’t try to button it down. Start simply by being yourself. If you come across as unnatural or uncomfortable because you’re trying too hard to impress the investor, he or she will pick this up and feel less inclined to invest in you.

Pitching for Angel finance rule #2—Keep it short and professional
At an Angels Den SpeedFunding event, you will have just three minutes in which to present your case for Angel funding to each investor. Remember, these are wealthy individuals and you’re not the only one clamouring for their support. So while you need to be yourself, you also need to make your pitch professional—complete with all of the relevant information about your business, and its facts and figures. In short: you should know your stuff.

Think about an excited new mum or dad: they can answer any question about their baby. They know how much she weighs, what time she was born, what birthmarks she has, and where. Your business is your baby—and you ought to be prepared to answer any question that the investor might have, with the information right at your fingertips.

Make a list ahead of time of the questions that you might be asked during your pitch for Angel finance and make sure that you have those answers uppermost in your mind. If you have to dig for the answers (‘Um… Good question… Let me see here… I know I have it somewhere…’), you’ll end up wasting time and looking unprofessional.

Pitching for Angel finance rule #3—Honesty is the best policy
While you must be honest in being yourself, you must also be honest in relation to your business. If you try to inflate the facts and figures, once again, your potential investor will find you out. He or she may discover your omission or exaggeration long after your pitch—but whenever they do so, their trust and confidence in you will be destroyed. So when you make that graph, or when you write up that product comparison, stifle the urge to manipulate the truth. Of course, you love your business or your business idea. Of course, you think it’s a great idea—it’s your own idea, after all. But just because you think it’s great doesn’t mean that you need to come off sounding like a cheap used car salesman.

If your potential investor smells something fishy—such as a prospective sales figure for the first year that sounds a little too optimistic, or an assertion that you’ll definitely crush the existing competition without so much as a whimper from them—your pitch will be over before it really gets started.

So good luck with your Angel finance pitch: remember to be honest, professional, and—most importantly—be yourself, and it’s sure to go well.

Entrepreneuers learning about angel investment in Qatar

The business finance sector has changed beyond all recognition in recent years. Before the introduction of private investor funding, the options available to most small businesses would have been to follow the traditional beg, borrow or steal routes. They could beg their friendly (hmm) local bank manager for a loan, borrow from family or allow a faceless venture capitalist firm to “steal” a very high percentage of their business.

Private investor funding has simplified the process of attaining additional business finance and made it far more accessible to small and fledgling businesses than ever before. Business angels (the gentlemen and ladies with the cash to splash) could literally be anyone, from a successful corporate CEO to an everyday person with a little extra cash and an adventurous spirit. While pitching for corporate finance to a panel of business angels may be far more relaxed than a meeting with your bank manager, it is no less important to plan and execute your pitch in a professional and informed fashion.

To these ends we thought we’d give you a few pointers on what those offering private investor funding will be looking for when they consider risking their hard-earned money with your venture.

Differentiation
A pitch for private investor funding must convey the uniqueness of the opportunity you are offering the business angels in front of you. By the end of your 3 or 4 minutes, you must have convinced them that there is something special about your business, something that differentiates it, if only marginally, from what exists in the market today.

Passion
How passionate are you about your business? Make your zeal for your venture irresistibly contagious and you’ll stand a far batter chance of winning over your business angel audience. If you believe in your product or service, are committed to its success and convey this in your pitch, you are one step closer to your private investor funding.

Sacrifice
Closely aligned to passion are the sacrifices that you have made for your business. How much time and effort have you committed to your venture? How much have you personally invested in getting the business to where it is today? Business angels are looking for individuals who are 100% committed to their business, so present your sacrifices with pride and you’ll be sure to gain their respect.

Expertise
The relevance of your background will play its part in determining whether a business angel decides to invest in your venture. What skills do you have? Where did you previously work? Have you ever run a business before? Now that you’ve already proven your business has merit and you have the gusto to run with it, they will be looking for whether you personally have the ability to launch, develop and grow a business.

Market
Private investor funding is not a bottomless pit of generosity. Some markets are so swamped with competitors that to make any impression you would need to inject vast sums of money into a small business. Equally some ideas are just too far ahead of their time, arriving before their market has matured, and this scenario would also require a business angel to commit more funds than they would wish to. It is important that you know your market and appreciate how it will change over time and with different economic conditions.

Competitors
Are there other firms developing the same idea? How flooded is the market currently? What barriers are there to entry into your market? Business angels are interested in protecting their investments so you should aim to prove that your business model is strong enough to fend off competition and that you have the relevant patents or legal protections to ensure that you will have no direct competitors.

Profit
Ah, finally we come to the main business angel motivator, the reason why private investor funding has been so successful – the desire for profit. It does not matter how innovative your idea is: some are just not destined to make money. You MUST know your figures – what is your turnover and profit? – know your projections for the next couple of years, the cash you have in the bank and what you spend your money on. Business angels are looking to see a return on their investment, and need to be sure that you have a cast iron grip on the finances of the business and know exactly how you are going to turn their funding into profits.

Private investor funding is now available to ANY business or entrepreneur looking to launch a new ventureor any business looking for an investor. So if you would like to find out a little more about pitching to our business angels for funding to launch, develop or boost your business then come to our website at www.angelsden.com

This article was posted on 2nd March 2009.  http://blog.angelsden.co.uk/index.php/2009/03/how-to-secure-private-investor-funding/

Be honest. It is often tempting to exaggerate or Gild the Lily, but you WILL get found out eventually and Angels will not be happy. Angels like the truth. Your summary should promote trust and if “just one little white lie” creeps out, Angels start to look for the others. Now you are on the back-foot.

The executive summary is neither an introduction nor an abstract; it IS the business plan in miniature. It should stand alone and be interesting, concise and clear. It should take no more than 5 minutes to read and when finished the Angel should be able to say “So that’s what these people are up to”

Here are several common mistakes that can make your executive summary less effective:

• Too wordy, and failing to get to the point. Angels are busy.
• Trying to be all inclusive (it should be a summary)
• Failing to show a unique or exciting opportunity
• Failing to summarise the investment sought
• Failing to generate interest in the reader

Some suggestions to combat these problems:

• Limit your executive summary to a maximum of 3 pages; 1-2 pages would be best
• Focus on the opportunity and explain why it is special
• Make certain that the opinions and claims in your executive summary are fully backed up by the other sections of your business plan
• Use only concrete facts and figures that explain your business concept, market niche and financial projections
• Don’t forget to include the details of your investment (the amount you need, what you will spend it on, and the return you offer your Angel)
• Keep the Angel in mind – why are they reading the plan and what response are you hoping to generate?

A good executive summary should demonstrate:

• A business opportunity that makes sense
• A clear plan for success
• A capable management team
• A clear, specific, and definable market
• Significant competitive advantages
• A solid and believable summary of the financial projections
• An excellent chance for Angels to receive a healthy return

The outline of your executive summary will vary based upon your particular business. But regardless of the format, every executive summary should include the following areas

The Opportunity
It should immediately grab the attention of your Angel. This is often best achieved by explaining why your business is different or unique. Clarify your business advantages, how you can break into your market first, the benefit of your proprietary product, or how research supports a significant customer demand for your product or service. Essentially, what differences or characteristics will lead to success?

The Product or Service Description
Describe your product or service in terms of its benefit to your potential customers. How does it work? What is it used for? Where is it sold? How much does it cost? How does the customer benefit? Remember to limit yourself to highlights in this section. Be brief.

The Market
Who is your customer? How large is your market? Who are the competitors? Why are you better? What are your market share projections? Your reader must be convinced that potential customers will have the want, need, and ability to purchase your product. Don’t try to avoid the fact that you have competitors. Instead, explain how you can gain market share with your business advantages.

The Management Team
Describe the management and how they will lead to your success. Is it clear your team is well-rounded with the experience, expertise and capabilities to achieve the goals outlined in your business plan? Does your board of directors or advisors bring credibility and experience to the table? Be warned – management weaknesses will ensure that Angels will go no further.

The Finance Requirements
How much money has been invested to date? What are your earning projections for the next three years? What amounts are currently required? What will the funds be used for? From whom do you expect to receive your investment? What specific return do you offer an investor? What is the exit strategy, in terms of both time and return?

At what point in the writing process is it best to write your executive summary? There are three schools of thought. The first says prepare it before you write the rest of the business plan. The second says write it before, then again afterward to combine the best of both. The third says prepare the executive summary only after the rest of the plan is complete.

Which approach is correct? It’s really a personal decision, but it has been our experience that preparing the executive summary when the rest of the business plan is complete is fairly effective. This allows us to summarize the plan after all the information has been laid on the table with the hindsight of compiling the entire plan.

Remember to review your executive summary many times and ask yourself whether it grabs the reader’s attention. Will they be excited about your business? Will they want to read the rest of the business plan? If the answers to these questions are no, rewrite it. Show it to a friend or business associate and ask them to be critical. Many times after someone reads your executive summary they will say “It’s great, but what about…?”

If you find yourself explaining important information to someone after they have read your executive summary, then it is likely that that information should be included in the document.

This article was first posted on 13 March, 2008.  http://blog.angelsden.co.uk/index.php/2008/03/how-to-write-an-executive-summary/

Most investors in Qatar will expect a formal business plan rather than a piece of art!

Anyone who’s ever started their own business—and succeeded—knows just how important a good business plan can be. A good business plan is a road map to the life cycle of your venture: from joyous conception, to successful maturity and the ultimate exit strategy. To be classifiable as a ‘good’ business plan, it will require careful preparation and focused attention to detail to define every step along the way.

A business plan can be a complex document, but, when you remove all of the waffle and filler, it can be boiled down to the following four essential elements.

1. What is your business concept?
Every business is built around a concept and a vision. The more clearly defined this concept is, the easier it will be to know how to focus and grow the business. For example, the concept of ‘Joe Smith’s Furniture’ might be something like:

Joe Smith’s Furniture will sell high-end dining and coffee tables to young, fashion-conscious professionals over the Internet.

Defining his concept at the beginning helps Joe to establish a niche for his business—an area in which he specialises that sets him apart from his competitors.

If you ever need to seek additional finance, your business plan will show potential investors that you have thoroughly considered your venture, and have a clearly defined idea and direction for your venture. All too many new business owners make the mistake of trying to be ‘everything to everyone’, rather than narrowing the focus of the business to a specific niche market.

2. How will you let everyone know about your business?
Crucial to every business plan is its sales and marketing strategy. Well before you launch your business, you must know to whom you will be selling and how you will promote your products or services to them.

Again, all too many first-time entrepreneurs design their strategies around the mass market—but unless you have a bottomless bank account, this is a difficult thing to achieve. You must define your target audience—their approximate age, tastes, location, employment, etc—with the accuracy of a police profiler. The clearer your vision of them is, the easier it will be to find them and to sell to them at their level.

How you promote your business to that target audience—online, newspaper, billboards, trade shows, shop front and concessions, and so on—will be determined by the profile you’ve created. Whichever route(s) you choose, your business plan needs to define your strategy and schedule for promoting your business clearly.

3. What stands in the way of your success?
When launching a new business, you need to be fully aware of your opportunities and barriers. These will include: your skills and experience, and those of others with whom you’ll work or whose skills you’ll utilise; your financial position; the economic conditions in which you are starting your business; and, most importantly, what competition you will face.

You must consider direct and indirect competitors, and, if there are none because you are launching a brand new concept, then you must consider what barriers there are to others entering the market and competing with you (in terms of cost, time, expertise, contacts, etc).

A good business plan also looks realistically at local competitors. Out of hubris, the new business owner might be tempted to discount these competitors—but investors won’t and to ignore the risks in your business plan is a foolish tactic. Therefore, a good business plan carefully researches the competition before the business ever begins.

4. Does it stack up financially?
Finally, the perfect business plan must include a realistic three-year or five-year financial forecast. We all know that the facts and figures are the boring bit, and I appreciate that you just want to jump right in and start selling, but it is this planning stage that will provide the most important information for your business. Potential investors will need to see that you’ll make a profit and you need to know whether there is any merit in the venture before you launch headlong into it. A well-defined financial section to your business plan will also provide you with a road map to success against which you can measure your progress.

If you’re new to this sort of thing, ask for help from a family member who either owns his or her own business or is an accountant, or pop into your friendly local bank and see if it can provide you with information. Additionally, you should contact Business Link (which is always good for this sort of advice), or approach local businesses to see how much guidance they will offer.

Good luck writing the perfect business plan. When it’s ready, why not come to www.angelsden.com to discover the best way in which to finance your new venture?

This article was first published on 30 April, 2009.   http://blog.angelsden.co.uk/index.php/2009/04/creating-the-perfect-business-plan-to-find-finance-for-a-new-business/

We’ve compiled a five point “what not to do” guide for those looking to impress with their business plan.

1. The exaggerated claim
People seem to have a compulsion to exaggerate things to make them sound better than they really are: “Oh yes, our neighbours are as quiet as a mouse, you’d hardly even know they were there,” when you’re looking to sell your home but realise that not everyone’s as partial to all night parties as the teenager next door. “She’s a beauty, absolutely original and really reliable,” when you’re selling your car because it’s cost you more in mechanical repairs than you spent to buy it. “I’ve never felt this way before about someone”…Ok, you get the idea! Creating a business plan is all about building a document full of enthusiasm and optimism, not fantastical and outlandish claims that don’t stand up to scrutiny.

2 The personal mission
Whilst it is important that you present both passion and enthusiasm for your venture in your business plan, this is essentially a corporate tool designed to reflect the potential of your business and not a platform for achieving personal goals. Consider who will be reading your business plan: bankers, angel investors, potential business partners and so on. They will not be interested in your need for self worth or your childhood dream to become an entrepreneur. They are interested in facts, figures and potential, and so should you be.

3. The story of Your Life
Those who might read your business plan will not appreciate finding themselves flipping through the equivalent of War and Peace so keep things clear and concise. Some will only read your executive summary, but others will want to view a little more detail – notice I said “a little more detail.” Stick to the point, don’t waffle, and always be aware that those who will read you business plan will be busy people who are in a hurry to discover what they need from your document.

4. If you don’t know, don’t guess
One of the worst things you can do in a business plan is to pretend to know something that you don’t fully understand. Readers of this document should be considered to be business savvy individuals, and as such they will be able to spot inconsistencies and inaccuracies in your business plan. After all, they would not have got to where they are today without a decent amount of knowledge and scepticism. If you are found to be less than 100 per cent truthful you will instantly loose all credibility and any chance you might have had of investment or partnership. If you don’t know something, find out, or ask someone to help you who does know. Your business plan needs to be watertight, consistent and wholly accurate.

5. Complete understanding is of absolute necessity.
The most common use of a business plan is as a tool to help you to gain finance for your business and its activities. In these circumstances it’s often the case that you’ll need to back your business plan up with a presentation in front of investors or business angels to win over their hearts and wallets. In this meeting you’ll need to add personality and passion to the dry facts of your business plan, you’ll need to connect with those you are presenting to, so that they believe in your ability to make the business a success. , and you’ll also need to know your business plan inside out. It will not be acceptable for you to simply say: “my accountant created those figures, so I can’t tell you how they were calculated,” or “that bit was written by our web developer so I don’t really understand the impact of SEO on our marketing strategy.” You will need to understand every aspect of your business plan and be able to prove how the facts and figures show that your venture will be a roaring success.

To summarise: When creating your business plan always think of your audience and how they would like the information presented to them. Keep it brief but brimming with proof that your venture will succeed. Don’t exaggerate or write about subjects you don’t fully understand. And always know your business plan from top to bottom and side to side, in case you’re ever in a situation where your knowledge of its contents could fundamentally change the fortunes of your business.

This article was previously published on 10 April, 2010. http://blog.angelsden.co.uk/index.php/2010/02/not-in-your-business-plan/

How to pitch an angel in Qatar

Before you pitch your venture to a small business investoryou need to be sure that you are completely ready for what could be the most important few minutes of your life. I mean, how often does anyone get to present in front of a wealthy, successful individual who has the financial clout to literally change your business fortunes in an instant?

Let me answer that one for you … not often, not often at all! This could be your one chance to get it all right, to present the perfect pitch; to reply to questions with measured wit and devastatingly accurate and convincing information. Now, with that sort of pressure wouldn’t any help or advice on how to handle this situation be worth its weight in shiny, shiny coinage, or at least thanks? So here’s our five top things to remember when pitching to a small business investor:

1. Your name – And yes, before you ask, this is the level of humour we will be displaying in this blog article! However, it’s surprising how many people go blank, I mean completely blank when put under this sort of pressure. You’ve seen the sweaty, twitching victims, I mean contestants, I mean entrepreneurs on Dragon’s Den falling foul of this I’m sure – umm-ing and ahh-’ing their way through vital moments of airtime. Don’t let this be you. Practice, practice, practice in front of friends, family, colleagues, anyone you can so your nerves are under control on the big day.
2. Your numbers – There’s nothing more annoying for a small business investor than a pitch where the entrepreneur does not know his or her numbers. Being able to present your gross and net profits over the coming years and effectively showing investors how they will make their money back with an obscene amount of profit is the foundation that your pitch’s success is based on. If you stumble at this point your pitch is as good as over. The fact that you may have an accountant to do all the figure work for you is irrelevant because as the person stood in front of a small business investor it is you who has to know the intricate financial workings of your company.
3. Your grasp on reality – Your expectations must be realistic and well researched or you’ll lose an Angel’s interest and respect in an instant. One of the most common mistakes a new entrepreneur will make is to overvalue their company. By asking for x -amount of small business investor funding for y-amount of equity, some forget that these figures tally up to a valuation, and this valuation needs to be justifiable. The other school-boy error is to woefully underestimate your business’s financial needs or incorrectly present the potential allocation of these funds. All of which can only result in the small business investor quickly deducing that your lax grasp on financial reality makes funding your venture too risky.
4. Your product or service’s unique qualities – Whether it’s because some entrepreneurs get caught up in their own hype, or they once knew the fundamentals of their uniqueness, but the practicalities of launching a business have pushed those thoughts so far out of their conscious mind that they stumble when asked. You have to know your product or service’s unique qualities or your pitch is dead in the water. Investors are essentially looking for a return on their capital and they know that your business is most likely to succeed if you are offering something that nobody else is. Now, whether the uniqueness of your business is that you are doing something completely new, or that you’re going to be doing something better than anyone else in a sector, it is essential that you are able to express why you will stand out from the crowd to a small business investor…and be able to get that crowd to open their wallets.
5. Your exit strategy – This is the small business investor’s payday. It’s lovely to think that a business Angel will be interested in investing because you have a wonderful company that they can feel as emotionally connected to as you do right now, or that they are being generous, or that they’ve always dreamed of helping a business like yours off the ground. However, the reality is that the vast majority of Angels are most interested in the bottom line, which in most cases means the exit strategy. Your plans for an exit strategy will affect their investment, so have a clear plan in mind that will benefit them as well as yourself and you’re on your way to winning their funding. This might be a part or full floatation, a buy out or a sale to a major competitor, but whatever it is your plan must be clear and financially rewarding for all concerned.

Good luck in your pitches. Keep in mind all we’ve said here in this article because however much you might think that this advice is obvious and you don’t need to follow it, I can almost guarantee that you’ll wish you had when you come face to face with a small business investor that you’re keen to impress.

This article was originally posted on Aug 23rd, 2010  http://blog.angelsden.co.uk/index.php/2010/08/5-things-angel-finance/

Are you cut out to be an angel investor in Qatar?

Financial Angels, aka business Angels, provide much-needed funding to entrepreneurs and small business owners, assisting them in establishing or growing their business. While business Angel funding is not yet being used to its fullest potential in Qatar and the Gulf region, increasing numbers of entrepreneurs are turning to these financial Angels for funding. If you have toyed with the idea of becoming a business Angel, there is truly no better time than the present to enter this potentially profitable realm. Due to the current economic climate, there are deals to be had, and these deals have the potential of turning into highly lucrative investments in the coming years.

There are many reasons why people choose to become financial Angels, not the least of which is – of course – the money. Investing in promising start-ups as an individual or as part of a syndicate can result in significant returns, particularly for those who develop a diverse portfolio. And, there is a distinct sense of well-earned pride when you become a financial Angel, as it is often considered a clear indication that you have arrived. When you have achieved a position that allows you to provide funding for businesses, you have likely met at least some of your professional and financial goals, and your hard work is now paying off.

Aside from the financial aspects of being a private equity investor, some become financial Angels out of a desire to help others achieve their goals, promote small business ownership or put something back in out of gratitude for their own success. It should be noted that business Angels often go beyond merely providing funding and also lend their skills and experience to help ensure the success of the company in which they have invested.

Because financial Angels are most often investors who have a high net worth, it is a common misconception that someone must be rather wealthy to become an Angel. While it is true that a good amount of expendable income is required, it is not uncommon for an Angel to begin by investing as little as £10,000. Starting out with a modest investment is a good way to get your feet wet and to help you determine if private equity investments are for you.

If you are seriously considering joining the ranks of the thousands of financial Angels worldwide, here are a few other tidbits for your consideration:

• It is a good idea to have a legal advisor on board who can assist you in reviewing documents, completing agreements and determining the terms of any deal. Angel’s Den Qatar can recommend such an advisor.
• It is also a good idea to enlist the services of a corporate financier or accountant with experience in advising on tax issues and assessing business plans. Angel’s Den Qatar can recommend an accountant.
• You may want to consider teaming up or investing in parallel with a seasoned Angel who won’t mind throwing a bit of advice your way when needed. Angel’s Den Qatar can affect introductions.
• Like any other business endeavour, you will need to develop a plan that includes how you intend to realize your investment goals, as well as an exit strategy.
• Do not rush in. Take your time to find the company – or companies – that feel like a good fit and show promise.
• Once you have narrowed down your list of potential companies, take the time to learn more about the entrepreneur, management team or directors for each business. Make sure that you will be in good company and are not falling in with a questionable crowd.

Financial Angels play an integral role in the success of many small businesses and in bringing brilliant ideas to fruition. If the excitement of investing in promising start-ups is appealing to you, and you get a certain thrill from the idea of lending your business acumen to help others achieve success, becoming a private equity investor may be the perfect fit for you.

This post has been adapted from the blog dated 7 Sept, 2010.   http://blog.angelsden.co.uk/index.php/2010/09/are-you-cut-out-to-be-a-business-angel/