Smaller firms can still attract funds

15 March 2010

The biggest problem facing small and medium-sized firms depends on which survey you read - cash flow, growth funding and falling demand have all been mentioned.

The truth is that a single factor is rarely responsible for all problems. A business generally comes unstuck because several things go wrong, combining to create a significant issue.

For small firms, the past two years have been a bruising time and while it may not be the answer to every woe, having access to specialist advice along with funding can make the difference between going under and riding out the storm.

So when lenders are slamming their doors it’s important to realise that other funding options are available.

The first step to recovery is to put in place a plan that addresses weaknesses in the business and its strategy. If funding is to be attracted from, say, business angels or private investors they need to be happy that a firm understands its issues.

And this sort of planning isn’t likely to be a case of a few tweaks here and there. Sometimes difficult decisions will have to be made about management roles, which may sit uncomfortably in a small organisation.

But a good business turnaround specialist will be looking to save a firm and bring in expertise to advise on any holes that might need patching.

Remember - it’s possible to make a success out of a foundering business and attract funding from a variety of sources.