Sealing the deal

Legislative, regulatory and commercial demands are all driving rapid evolution in the waste and recycling industry. Innovation and entrepreneurship is set to thrive as demand for solutions that deliver infrastructure and technology advances continue to grow.

In seeking to extract as much value as possible from waste resources finding the right investment partner can be vital.

Having a long-term view of the direction your business is going is essential. Companies should maintain a strategic plan and avoid being too reactive. The route to success relies on raising funds while you still have adequate financial resources, otherwise you will end up negotiating from a weak position and/or putting day-to-day business operations at risk.

You need to allow enough time to prepare a business plan, setting out in detail your investment case, meet with investors, conduct negotiations and close the deal. This is likely to take at least 6 months and maybe up to 12. Funding may be secured more quickly but there is only downside in leaving things too late. Casting around for support at the last minute usually results in disaster.

We often come across businesses leaders with commercial creativity, technical expertise and great drive and enthusiasm, but they havent sat down and tried to articulate their vision in a business plan. This is a mistake as most investors will expect to see one, if only to confirm that management has sufficient command of the details of the business and understands the important of disciplined financial planning. Without this, it is hard to secure investors confidence passion alone is rarely enough to seal the deal.

Insight

Sourcing expert advice can help to refine your investment proposition to maximise its appeal to investors. Good corporate finance advisers understand the points that will influence the investor decision making process and should also be able to identify the best sources of capital for your business.

This kind of expert insight can help to address the gaps in your plan, identify potential weaknesses in the business or its management team and help you to articulate a credible plan to deal with these issues proactively.

You need to put yourself in the investors shoes and anticipate the questions they might ask,which may not be the ones youre expecting. Dont assume that all investors have in-depth prior knowledge of your business, market or technology (even if they claim to do so). You need to paint the complete picture. Remember, that your business is just one of a range of opportunities available to an investor so being clear about the value proposition and what differentiates you from the crowd will give you an advantage.

Challenge

However, it is not solely a one-way street raising money is very important but you should also feel free to challenge potential investors about what value they can add to the business over and above the cash contributed. Remember that you will have to live with external investors through a business cycle which may not turn out as expected and that is where relationships (including between the individuals on both sides) become extremely important.

Finally, it is important to be realistic about the valuation of your business. Even though many aspects of the waste and recycling sector are doing relatively well in the downturn you need to take into wider account market conditions and accept that investors will expect a return. The views of the founders and managers of the business need to reflect realistic projections of where the business will be in one, three and five years time.

This is an exciting time in the waste and recycling industry with enormous potential for growth. Get it right and business can enjoy support from investors that will help to put the UK at the forefront of waste and recycling technologies.