Supporting Businesses On A Journey To Excellence
Business Growth
A business goes through a number of growth phases during its life-time. Each phase is characterised by specific issues (both enablers of growth and constraints to growth) which have to be addressed for the business to be successful. This can only be done if the owners and management are aware of the issues and have well-defined strategies to deal with them.
A business goes through a number of growth phases during its life-time. Each phase is characterised by specific issues (both enablers of growth and constraints to growth) which have to be addressed for the business to be successful. This can only be done if the owners and management are aware of the issues and have well-defined strategies to deal with them.
Business Funding
One of the specific issues which is prevalent in all growth phases is the requirement for resources to fund the growth. If the business is not able to generate sufficient cash internally and the owners cannot fund a shortfall, the business has to resort to external funding. The external funding can take one or more of a number of forms including more traditional funding such as asset finance, loan finance and an overdraft facility or angel investment and venture capital or other private equity investment. The most appropriate form or combination of funding will largely depend on the growth phase of the business.
One of the specific issues which is prevalent in all growth phases is the requirement for resources to fund the growth. If the business is not able to generate sufficient cash internally and the owners cannot fund a shortfall, the business has to resort to external funding. The external funding can take one or more of a number of forms including more traditional funding such as asset finance, loan finance and an overdraft facility or angel investment and venture capital or other private equity investment. The most appropriate form or combination of funding will largely depend on the growth phase of the business.
Business Exit
Most closely held businesses (businesses which are controlled by one owner or a small group of owners) sooner or later experience a complete or partial change in ownership which may or may not have a dramatic impact on the future of the business, depending on how well the business has been prepared for such an event. The change in ownership may be because of a change in the personal circumstances of individual owners such as emigration, death or retirement or because of other powers at work such as a merger, acquisition or management buy-out.
Most closely held businesses (businesses which are controlled by one owner or a small group of owners) sooner or later experience a complete or partial change in ownership which may or may not have a dramatic impact on the future of the business, depending on how well the business has been prepared for such an event. The change in ownership may be because of a change in the personal circumstances of individual owners such as emigration, death or retirement or because of other powers at work such as a merger, acquisition or management buy-out.
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Business Investors
Investing in or buying a business has many pitfalls. The starting point is to understand the specific growth phase the business finds itself in. This gives an investor a thorough understanding of the generic challenges faced by the business and creates the framework for the due diligence investigation to be done. But an investor would as a general rule also want to know that the business has the potential for sustainable growth into the future which will result in an attractive return on investment. To achieve this, the business must display certain characteristics which are indicators of a potential high-growth business.
Investing in or buying a business has many pitfalls. The starting point is to understand the specific growth phase the business finds itself in. This gives an investor a thorough understanding of the generic challenges faced by the business and creates the framework for the due diligence investigation to be done. But an investor would as a general rule also want to know that the business has the potential for sustainable growth into the future which will result in an attractive return on investment. To achieve this, the business must display certain characteristics which are indicators of a potential high-growth business.
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