Raising outside investment for your firm requires careful planning.
You will be familiar with the horse trading that goes on in the Dragons' Den..."I will offer you £500k for 30% of the equity" etc....all very much off-the-cuff sounding stuff.
Most business sectors have been used to involving outside investors and in 2011 outsiders will even be able to buy into firms of Solicitors .
You will doubtless want to raise the most money for the equity in your firm. Getting the best value depends on:
1. Managing the timing of when you are looking to get the money
2. Ensuring the firm is professionally run well before you want to ask for money
3. Making the right strategic choices along the way so that your firm's profile attracts a premium rather than a discounted price.
So what should you be thinking about and planning to improve in your firm?
Which features will set your firm apart from your competitors and increase the value and salability of your equity?
There are various rules of thumb used to value equity in people businesses - in terms of multiples of fees or profits. These give a range of values which are then flexed up or down depending on the state of market and the relative strengths and weaknesses of your firm.
As a specialist financial advisor to marketing agencies and professional firms I am aware that it usually takes months and years to make the sort of lasting difference to your business that will increase the value of your equity so you should start working on this now - even if you are a long way from needing to offer equity to outsiders.
As a first step, why not pick the phone up and call John or email him and arrange to meet up.
More on cash: http://www.nomizon.co.uk/cash.htm
His credentials: http://www.linkedin.com/in/johntoppin
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