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Investors aren't interested - where am I going wrong?

Starting out as an entrepreneur or start-up is tough going. You’re full of ideas and strategies, eager to hit the ground running.

Tirelessly you’ve worked on perfect pitches and plans - but for some reason, getting those all-important investors on board just isn’t happening. It can be really frustrating - but all is not lost.

Let’s go back to basics with attracting the best type of investor for your business.

Have a standout USP

This really does sound basic, but it’s amazing how easy it is to lose sight of what actually makes your company - and your product - unique. But by being clear what your USP (Unique Selling Point) is, you’re much more likely to stand out from the crowd.

Whether you’ve designed the next super accurate Covid test, or simply used science to create a new flavour of ice cream, if you can prove there’s a demand (and profit to be made) you’re well on the way.

Check your business plan is watertight

This about credibility. A realistic, thorough, comprehensive business plan serves to prove one thing to investors: that the risk of investing in your business is worth it.

Without waffle or superfluous extras, your business plan should lay out your business objectives and how they will be achieved. It will also outline the expertise you have at hand, and that you fully understand your customers as the target market. It must also contain a detailed description of the products or services you’re offering.

Additionally, your business plan is expected to highlight your distribution strategies, as well as how you’ve arrived at your pricing and promotion. Mention where any barriers to entry lie too, and how you plan to tackle them. And of course, keep everything concise and digestible.

Your marketing plan sits at the heart of your business plan too. It shows where your business sits in the market, where your opportunities for growth lie and what sales potential exists.

Remember that investors who already work in (or are familiar with) your industry can provide huge expertise to help you get ahead. However, also be prepared for their questions to be more targeted, so make sure you can showcase your experience.

Spend enough time on your financial forecasts

Obviously your financial forecast will form an important part of your business plan. When presenting them, make sure everything is set out professionally using something like Excel. As a minimum you’ll need a balance sheet, profit and loss account, and a cash flow statement. Break it all down month-by-month for year 1, and make sure your annual forecast at least covers years 2 and 3.

Outline exactly what the investment will be spent on

Investors understandably want to know exactly what their investment will be spent on. Cold hard facts and figures.

Will you be spending it on stock? Legal or accounting services? Salaries or recruitment costs? Research and development (R&D)?

Displaying efficient use of existing capital right from the off can help with developing insightful leadership. This can ultimately also make you more attractive to investors.

Highlight to investors that you’ve considered every angle and that you wish to grow your company quickly with as little of their cash as possible. After all, spending wisely as you progress is a crucial skill, regardless of whether there’s an investor on board or not.

Prove that you’re on the grow

Sure, investors want to know about your commercial viability now and in the months to come. But where is your business actually headed? Where is it realistically going to be in, say, 5 to 10 years from now?

Ok so you can’t predict the future - but you can put in concrete plans for growth-boosting innovation. We’re talking cutting edge new products, services and processes that will take your company from the here and now and propel it into long term survival.

Innovation is essential, but for many small companies especially it’s simply about treading water right now. And of course that is important. But treading water isn’t what investors really want to see. So with this in mind, make sure you’re grabbing all the Revenue-backed reliefs you can.

One such tax relief is R&D Tax Credits. Launched back in 2004, it’s a very generous government incentive for companies of all sizes and in all sectors to invest in growth. Essentially it works by giving a tax credit of 25% against eligible R&D expenditure a company has incurred on qualifying R&D activities. It’s also offered in addition to the normal 12.5% revenue deduction available for R&D. So in fact, the corporation tax benefit is effectively 37.5% - very generous indeed.

If your company has any kind of plans for innovation and growth, it’s well worth reading up on R&D Tax Credits to see if you’re eligible. And with even the smallest of R&D projects potentially leading to thousands in a claim, it’s something you won’t want to miss out on. Plus, any claims you do make may well be looked on favourably by potential investors.

Make claiming R&D Tax Credits easy with Tax Cloud

Trying to put together an R&D Tax Credit claim on your own is strongly discouraged. Unfortunately it’s not simply a case of filling in some forms and hey presto, job done. In reality, it’s a complex, niche area of accounting with many pitfalls - which is why many companies in Ireland seek specialist support.

Start off by using our free tax credit calculator to get an estimate of how much you could receive from Revenue. Then sign up (again, free!) to begin the step-by-step process of completing and submitting your R&D Tax Credit claim.

Tax Cloud was developed by R&D tax specialists Myriad Associates to help smaller companies navigate the somewhat muddy waters of Revenue’s requirements. Fully supported by our team, it’s an easy-to-follow way of making sure everything is correct and fully maximised. And, as you enter all your figures and details yourself, the fees are also far lower than our traditional service.

For more information on Tax Cloud or to get started today, call us +353 1 556 2001 or use our contact page.