No matter how original or lucrative a business plan may seem, it is the personality of the individual that will come across when delivering the pitch for prospective investors, said Bob Rothenberg, Senior Partner at London chartered accountants Blick Rothenberg LLP.
In light of The Apprentice final, experts at the firm have provided ten top tips for prospective entrepreneurs, highlighting areas where a selection of fallen candidates went wrong.
- Quality of the person
Bob Rothenberg said: “It is just as much about the quality of the people as it is about the quality of the venture, so be prepared to impress potential investors about you as well as the business.”
Confidence is key when delivering pitches and communicating with potential investors, however it is important to bear in mind that over-confidence can be dangerous, as prospective investors will be put off if an individual comes across as unrealistic and conceited, for example, James eventually got shot down for his over-confidence in the process.
Simon Mayston, Partner at the firm said: “Show your personality when pitching and dealing with your potential investors, as that is what they are investing in.”
- Picking the right team
Picking a strong team that all have the same motives in mind is essential when pursuing a business venture.
Frank Nash, Tax Partner at the firm, said: “It is vital to ensure that team members reflect the values of the business."
Having a strong team behind you that carries the same interests will give your business stability and give confidence to investors.
It is equally as important to be wise when choosing investors, said Nilesh Shah, Senior Tax Partner: “Choose your investor not just for the money, but for the advice and connections they bring. Be clear on who manages the business and have an exit strategy for self and investor."
He added: “Get some good friends/ contacts in legal, accounting, marketing, technical to become small investors with a promise of a small amount of more shares based on what connections and advice they can provide to the company”.
Stick with your idea and have the conviction to follow through on the business plan. This will not only give potential investors the confidence in your venture, but will also provide the motivation to grow your business.
Simon Wagman, Head of Business Services, said: “Although Solomon hadn’t fleshed out his plan, he was firmly committed to the business and with the right coaching and assistance could make something of his venture.”
- Know your market
Nilesh Shah said: “Many fail as they do not understand the market even though they have a good product”.
Although the initial stage of a venture is exciting, it is important not to jump into an idea before testing the waters of the market.
Frank Nash placed importance on having a wide knowledge of the market prior to starting a business venture, he said: “Make sure first that there is a market for what you are selling, don’t assume that the market will fall in love with your idea”.
- Keep investors up to date
Maintaining frequent and effective communication with stake holders will ensure they remain loyal to your venture and support any plans for growth.
Frank Nash said: “An investor who chases for information may choose not to invest on any growth phase”.
- Be original
Ensuring that your branding is completely unique will make your venture seem much more attractive to investors, who will be more likely to get on board with your business. One of the areas that Roisin fell down in was her unoriginal business idea in low carb, “healthy” ready meals, which the interviewers were quick to point out.
Frank Nash said: “Make sure you have not unwittingly copied someone else’s idea or brand, and thus avoid having to account to them for your profits”.
- Have a well thought out plan
An in depth plan will put more confidence in prospective investors and give them more reason to invest their money in your venture.
Simon Mayston said: “It is important to have a well thought out and constructed plan, not just a few pages with a lot of diagrams." This was the reason why Solomon got fired by Lord Sugar, he had no in-depth plan for his business and this was quickly pointed out by the interviewers and Lord Sugar.
Receiving professional advice is also useful in constructing a plan for your business, Genevieve Moore, Partner at Blick Rothenberg said: “Take professional advice early on, it’s far better to set up right from the start than try and unravel it all at a later date!”
- Protect your ideas
Once you have your business idea, you need to protect it, says Frank Nash: “Patenting is essential to protect your business ideas."
Many individuals lose out when they find their ideas have been copied by someone with a greater backing and more capital to pursue a venture.
Another form of protecting your ideas is not giving away too much equity too early, said Frank Nash: “Growth phases will require external investment and equity may be diluted quite sharply.”
- Be aware of tax and government schemes
Nimesh Shah, Head of Tax said: “There are lots of tax reliefs available when you start a new business. Government schemes such as the Enterprise Investment Scheme can be extremely attractive”.
Frank Nash also said it is important to “Ensure investors are appraised of tax reliefs as soon as possible, this may help leverage up the cash they may be willing to risk, increasing the most investment in the company”.
Alan Pearce, VAT Partner added: “Make sure the new venture monitors sales figures to ensure it registers for VAT when it exceeds income of £81K”.
- Keeping up to date with financial records
The less glamorous aspects of setting up a business are equally, if not more important as the exciting side.
Genevieve Moore, Partner, said: “Keep up to date with financial records because it will save you hours and hours of time in the long-run”.
On a final note: Simon Wagman, Head of Business Services said: “While thousands of people tune into The Apprentice every year, it is essential that young entrepreneurs going into business pay attention to the basic fundamental issues that will enable them to succeed in the future.
As we have seen in the process, it’s all about having a variety of skills, knowing which to rely on, and which you lack.Whether you love or hate Alan Sugar’s approach to the business process, its proven success is something that will inspire individuals to set up their own business ventures in the future.”
For further information, please contact Simon Wagman at firstname.lastname@example.org, Head of Business Services at Blick Rothenberg.