Starting or expanding a business takes a lot of planning, and one of the critical steps is insuring you have adequate financing. Kathy Bosse, new venture specialist with Alberta Agriculture and Forestry, goes through the steps to help secure those needed funds:
- Develop a business plan. “Make sure that you have thoroughly researched the sector you want to enter, and know that you have a business idea that has the potential to succeed,” she says.
- Tell your story in a compelling way. Provide a business case and use persuasive rational for the needed funds.
- Tailor your approach to the source of funding. “Research your funder’s requirements and prepare your documents,” she adds. “By doing so, you address their needs, and that gives you the best chance for success.”
- Prepare the information most funders require. “When approaching a lender or investor, you should have a business plan, credit report, income statement, balance sheet and cash flow projections.”
- Understand how financial ratios can make or break your deal. Bosse says that ratios can provide potential lenders or investors with information in five key areas - liquidity, solvency, profitability, repayment capacity and financial efficiency.
“Asking for funding is not unlike a job interview,” she adds. “Be prepared to address holes or weaknesses in your plan to show that you also recognize obstacles but can overcome them. Being prepared is vital to any effective bid for business funding. If you have the right information ready, it is more likely you will get the funding you need.”
Connect with a new venture specialist by contacting Alberta Ag-Info Centre:
Hours: 8 am to 5 pm (open Monday to Friday, closed statutory holidays)
Toll free: 310-FARM (3276)