The Process of Strategic Planning to Raise Capital

Strategic planning is more important than you think

Strategic planning not only defines the direction for your company, but it also addresses complex matters like the especially important issue of how to raise capital. Getting your business off the ground is a major achievement, but to go further, a little bit of additional working capital can broaden your horizons.

On a previous post on the Cerius blog, Theodore E. Lavoie wrote about Raising Capital: The Strategic Planning Process To Consider Before You Start as an excellent starter guide on planning it out strategically.

After walking you through the steps of raising capital through strategic planning, Lavoie outlines the three hurdles you may face:

Every business model has hurdles to overcome, when it comes to raising capital, including yours. The most common ones include a sound communication of the rationale of the need for your product or solution when compared to your competition, market, trends or global economic realities.

Your second hurdle may include timing. Convincing potential investors to put their capital into your company, ahead of or concurrent to cash flow positive performance, additional contracts or revenue creation;  convincing them of the reality, timing of your strategy, and that their capital will accelerate this outcome, is the hurdle, and your challenge.

Third, is building investor confidence in the ability of your business model, to scale. Your current level of software, network, IP, delivery, production or supply chain, to scale to accommodate your growth assumptions, and handle the normal business ERP functions as your sales increase rapidly per your projections. Anything that can be disclosed regarding your relationship with credible strategic partners, or key (even Beta) clients, will help to resolve this issue.

Ensure that your valid independent statistics regarding the “Why” of your business model are sound and make a compelling business case. Your task is to convince Investors to commit their capital, by mating the “why” with a believable “how”. Show your investors the how and why.

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