Administrator, Author at Small Business Insider

What have we learned from 2021 and how should you approach fundraising in 2022?

Posted on January 20, 2022 Written by Administrator

Despite all the issues during the last two years business have still managed to raise capital. This will continue in 2022 although the number of successful raises will still be fewer than it was in 2019.

Let’s review some 2021 stats for early-stage businesses, and then offer suggestions to help your next equity raise.

All data included here is based on UK headquartered companies who raised equity capital from 01 January to 01 December in comparative years. Data comes from Beauhurst.

Raises – business stage

In reviewing the raises in 2021 we’ve focused in on earlier rounds to give a picture of what is happening in this part of the market.

The number of rounds by broad business stage shows that seed stage companies accounted for nearly half of all the rounds in the year.

Excludes dead and exited businesses.

Raises – Round Size

Often businesses do a number of smaller rounds, and it’s possible that the same business is being counted twice in any category.

What do we see when we look at the data for the number of raises by round size? 70%+ of all rounds were under a million and 40% were under £250k.

Does this mean you should raise £250k or less because there seems to be more activity? Running multiple smaller rounds is worth considering. However, the strategy depends on which type of investor you’re targeting.

Remember that this data shows reported raises. No one reports unsuccessful raises, and a conservative estimate is that half of businesses fail to reach their target.

Given this how should those with early-stage businesses prepare for a successful fundraise?

A clear proposition and USP

Remember how competitive it is. We receive hundreds of applications each month and see the same business ideas over and over again. A good idea alone is never enough. Make sure the problem you’re solving and how you’re solving it are clear. Use simple language. Strip out the jargon, minimise the adjectives and provide a description that your least business savvy friend can understand. If no one can understand what you do, no one will want to invest.

Differentiation is also key. What makes you so special? Everyone has a competitor- even if that is the option of doing nothing. So, outline how you are unique, how this is sustainable and be sure to take an objective viewpoint. It’s easy to believe you are better than your competitors, but does anyone who doesn’t work for your business think that? If you don’t know, find out.

A standout team

Investors invest in people, and many would take a good idea with a great team over a great idea with a good team. So, make sure you have a standout team. That includes sector experience, a balanced management team in terms of functional experience and any previous exits are a bonus.

If you are light in one area, it’s good to seek an advisor or non-executive director as that can give confidence to potential investors. They’ll also provide valuable advice and contacts.

Showing traction

Coming armed with proof that you have product-market fit and sustained growth goes a long way. If you have any big brands as customers or partners, highlight this as it provides further validation for your business. This is especially important for consumer brands and marketplaces. We see a lot of businesses in these categories. Unless you have a growing customer base, your business is little more than an idea and therefore perceived as a big risk by investors.

Professional preparation

Getting investment ready requires a lot of work, including preparing numerous documents such the balance sheet, the subscription agreement, the cap table.

We always recommend companies work with an advisor to create their deal as it helps ensure all information is available, professionally presented and credible. There are short-cuts, such as downloading templates, but the risk of a poorly presented deal is just not worth taking.

Effective targeting of investors

Be clear on the types of investor you want to target, be it regional funds, angel investors, or VCs. Then develop a targeted list.

If possible, work with a network like Envestors, which has deep knowledge of the players in the space as well as pre-existing relationships with investors. This approach will take away the guess work of trying to engage with potential investors on your own.

The early-stage investment in 2022 is shaping up to be much like the past year. This means preparing well so you are ready for the competition for funds, and the amount of time your fundraising will take.

ABOUT THE AUTHOR

Chantelle Arneaud is from Envestors. Envestors’ digital investment platform brings together entrepreneurs and investors across geographies, communities and sectors – creating the single marketplace for early-stage investment in the UK.

Envestors partners with accelerators, incubators and angel networks to provide a white-label platform empowering them to promote deals, engage investors and connect to other networks.

Founded in 2004, Envestors has helped more than 200 high growth businesses raise more than £100m through its own private investment club.

Envestors is authorised and regulated by the Financial Conduct Authority.

Web: https://www.envestors.co.uk/

LinkedIn: https://www.linkedin.com/company/envestors-llp/

Twitter: @EnvestorsLondon

What Does It Take To Be A Successful Property Developer?

Posted on July 22, 2021 Written by Administrator

I’ve lost count of the number of students I teach whose initial ambition was to become their own Project Manager. If you want to be a Property Developer, don’t do that. Instead, you want to be the CEO who hires a Project Manager to manage your projects for you, to be your eyes and ears on the project and to report back to you.

As a developer, you won’t be drawing up the architectural plans or laying any bricks personally. Instead, you’ll be hiring an architect and employing a main contractor who’ll take care of this. In fact, as a developer, you’ll probably have a couple of dozen different professionals working on your project. This is where the leverage comes in. Even though each of these people may have decades of experience in their respective careers, all you need to do is pay a relatively modest fee to hire them to work on your project. You are simply creating a team of professionals to work under your Project Manager, with you sitting at the top of the tree as the CEO. Now, look at you! Suddenly, you’re heading up a team of professionals with hundreds of years of experience between them and who have completed hundreds of development projects. And the best part is that you don’t have to shell out for their services personally; their fees will be paid for by the development finance.

If you find yourself having newbie nerves, think about Richard Branson. He recently launched his first cruise line, Virgin Voyages. But he didn’t start this venture, having spent thirty years in the cruise line industry, rising from cabin boy to captain. Instead, he’s simply an entrepreneur who saw a great opportunity and who used his existing CEO skills to pull together a team that already has all of the experience necessary to make it a success. Did he attend that first board meeting thinking, ‘I hope no one asks me what the front end of a boat is called or what it costs to build a cruise liner?’ Probably not. He has a team of people sitting around the table that can answer those questions for him. What he does have are the skills necessary to see an opportunity and build a team capable of taking advantage of it. And, of course, you wouldn’t bet against him succeeding.

Now, your role as a small-scale property developer is of the same mould. Nothing quite as grand as running a cruise line, but the principle is the same. You’ll be playing the role of Richard Branson in your (much smaller) property development business, and your extended team will be on hand to deal with the details and the technical stuff.

So what exactly will you, the developer, be doing? Well, at a high level, your job breaks down into several key roles:

You’ll need to establish your business, strategy, and brand, and decide what type of development you’re going to tackle.
You’ll have to recruit your team of professionals, including architects, solicitors, project managers, structural engineers, etc.
You’ll need to be able to find a supply of good quality, profitable deals. These will need to be analysed to sort the wheat from the chaff and decide which ones are worth pursuing.
You’ll be arranging the finance for your first project, working with both commercial lenders and private investors.

This is all well and good, but what skills do you need to be a property developer? Surely you can’t expect to earn the sort of money developers make without having any talent or knowledge whatsoever? Well, I’ve been training and working with developers for nearly 40 years, and here, in my opinion, are the essential skills that you need to do the job well.

1. Organisational skills

Your property development business won’t happen unless you are highly organised. You also need to be systemised and make sure you establish processes for each part of your business. They take effort and foresight to set up, but they pay big dividends and stop your business from degenerating into a shambles.

2. People skills

Development is fundamentally a people business. Not only will you be working with a team of professionals, but you’ll also be wooing estate agents, lenders, and private investors. This requires the ability to create and build rapport. And, of course, development projects always have a few bumps in the road, so you’ll need to be able to make sure you get to the end with all of your critical relationships intact, ready to go again.

3. Management Skills

Property development is a business, and you need to operate it as such. This means deploying management skills to run your business and being highly disciplined. You’ll also need to stay on top of cash flow, as even profitable deals could fall into the red on their journey unless you manage things effectively.

4. Decision-making skills

Any decision is often better than no decision, and in development, you’ll have a team of professionals to advise you. The problem can arise where the developer needs to make a difficult call, and they dither, hoping some silver bullet solution might suddenly arrive. This dallying has scuppered many a project, frustrating the contractor who can’t get on with things until a decision is made. So when the ball is in your court, make a decision quickly and move on. In development, time is usually money.

5. Hard work

Once you’re up and running, development can be a job you do in your spare time. But you’ll need to put in some hard graft to get started. You’ll also need to be persistent. Great deals don’t grow on trees, and there’s no guarantee you’ll find one quickly. The good news is that this frightens off most of the competition, so if you know what you’re doing and you stick with it, you’re likely to be successful.

6. Education

Your property development education is the glue that holds all of the above together. Can you avoid making any expensive mistakes without getting training? It’s theoretically possible, but then it’s also possible to jump out of a plane without training. The other thing that education gives you is the ability to see opportunities that other developers can’t see. And you’ll want that edge so you can get the best possible deals.

7. Determination

It’s easy to get disheartened. Great deals can be difficult to find, and projects rarely go entirely as planned. The spoils go to the developer who keeps going. But your first project will inevitably be your most challenging, and the journey gets easier as you build your experience and reputation.

Organisational skills, people skills, management skills, decision-making skills, hard work, and determination are already part of the working day for many people. To be a highly successful property developer, add in a little learning. The core skills you require are not specific to the industry, so be a little more Branson.

ABOUT THE AUTHOR

Ritchie Clapson CEng MIStructE is a veteran property developer of almost 40 years and co-founder of propertyCEO, a nationwide property development and training company that helps people create a successful property development business in their spare time. It makes use of students’ existing life skills while teaching them the property, business, and mindset knowledge they need to undertake small scale developments successfully, with the emphasis on utilising existing permitted development rights to minimize risk and maximize returns.

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How to propel your business to a genuinely transformational level of growth

Posted on July 12, 2021 Written by Administrator

Many businesses grow effectively for a number of years; they achieve this as they have a solid offering, they are delivering some proactive engagement with their market, they work hard, and they close sales.

Inevitably at some point the growth slows down. The practices and processes internally within the business reach their saturation point. They cannot achieve any more sales without doing things differently and all the small changes they make stop yielding results.

At this point the organic growth that the business is capable of has stopped delivering what the business needs. It’s time to think about something new and if you are not inspired by growth through merger or acquisition you need a new idea to generate dynamic growth.

Dynamic growth is about constant change. It’s about stimulating different results by taking new action, and it’s what needs to happen when you reach a profit plateau.

Choosing to be dynamic about your approach to business may be the thing that propels your business to a genuinely transformational level of growth. But where do you start?

Over the last 10 years I have been working on defining the characteristics of highly successful businesses to understand how they harness growth.

When you are thinking about what you need to do to build a dynamic approach to business growth there are three key areas to focus on. These three ‘pillars’ will allow you to make the changes to your organisation necessary to burst through the plateaux.

The First Pillar: Your Customer Journey

The experience that your customer has when they work with your business is everything.

You have a responsibility to shape a journey that not only educates your customer on the value of your offering, but also ensures that they experience your business as credible and professional.

Really robust businesses, that exceed their own growth expectations, have very diverse and well-planned customer journeys; they consider carefully the stages through which their customers travel and the impact that that has on their decision-making journey. As well as a highly tuned customer experience they have internal processes that create productivity and efficiency.

When understanding the challenges of a plateau to business growth the first place to look is in the detail of the customer sales process. A well planned and diverse customer journey that is implemented effectively internally will absolutely maximise the conversion rate and revenue generation.

Dynamic businesses will be thinking today about specifically what experience their customer has when dealing with their business and will be asking questions about how to enhance the quality and content of that journey. Really high quality sales process methodology will allow your business to draw in more customers and make more revenue and ultimately generate more profit.

For change: Put time into interrogating the experience that customers have when working with you. What are the stages that they move through? Is the way that you and your team interact with your clients well defined and diverse? Is their experience one of consistently high quality? Unless the journey your customers undertake is smooth and effective your business will be losing money.

The Second Pillar: Your Customer Communication

In simple terms, one of the most powerful tools your business has is the communication that it uses to reach out to its customers. What we say and how we say it has a huge impact on how much money we make.

The customer communications pillar within your business deals with every communication that your customer is exposed to and looks at how it impacts their decision-making. As the range of channels increases and we have ever more marketing and sales communications to explore, a smart business will look closely at its communications pillar.

Whether it be the business cards you handout at face-to-face meetings, the software you use to generate proposal, or the quality of the telephone calls that your sales team are making to your customers, a really strong communication pillar embraces multiple channels and creates high quality guidelines around how these channels should be used.

It is not simply a case of using email, it is a case of crafting an email that has a powerful impact within the sales communications pillar. Never take your eye off the content, structure, tone and delivery of every sales and marketing activity that comes out of your business. The message here is that if your communications to your customers are not of the highest possible standards, you will not be achieving the highest possible results.

For change: Make sure that you evaluate your customer communications. Go back to basics. Look at all your communications and check them for quality. Setup clear communications guidelines and make sure that your entire team is across them and implementing them.

The Third Pillar: Your People Management

The management area of your business refers to the processes and practises that your organisation uses to ensure that your customer journey is implemented to the highest possible standard.

Management is not simply about the leadership that your team receives. It is about the practises that your business embraces to drive the right outcomes. Within the area of management, you need to look at the structure of your organisation to ensure you have the right number of resources and that each person is working in the right fit in the right role. In truly powerful businesses, every resource in the organisation is lined up behind the customer journey in order that it can be delivered to the highest possible standards.

Once you’re clear that the people in your team are right, you then need to be thinking about how those people communicate with one another internally. Think about how you train and develop those resources to ensure they have the highest possible skill set; understand how performance is managed in an organisation to ensure that everyone is driving towards the right goals and achieving the right targets. All of these areas of your organisation come together to form the management culture that is shaping your business.

If you are focused on ensuring that your people are in an environment where they can perform to their maximum you will achieve better results. So, really dynamic businesses are asking; is my workforce well trained, well recruited and well developed? If the answer to any of those questions is no, it’ll have a negative impact on the amount of money you’re generating.

For change: Review all the members of your team. Are they the right fit? Are they where they can best perform and let their skills truly shine? Is additional training required? Are they all aligned with the vision for the business?

Any business that wants to grow and move past a profit plateau, needs to be dynamic. And being dynamic means taking control of the destiny of your business.

As a business owner or leader having the tools to drive constant growth in your organisation is one of the most powerful skills you can develop.

If you want to beat the fear of a revenue flat line look at the areas above and honestly interrogate how dynamic you are being.

ABOUT THE AUTHOR

Karen Dunne-Squire is founder of Elation Experts, which is on a mission to empower SME’s by giving them the knowledge and skills to increase revenue, build powerful sales opportunities and create committed, loyal teams that are motivated to drive change. Karen is a sought-after keynote speaker and creator of The Growth Framework, an award-winning methodology, applying ‘Big Business Corporate Insights’ to SMEs in a way that makes practical sense for them.

www.elation-experts.co.uk

www.linkedin.com/in/kdselation

How The Hospitality Industry Can Leverage Wellness Assets

Posted on July 7, 2021 Written by Administrator

After one of the worst years ever bookings are picking up very slowly and the hospitality industry is struggling. Given this difficult situation how hotels can leverage their wellness assets to rebuild their business in the new normal?

The old business model is broken, and forward-thinking hoteliers know this. They also know they need to find new ways to attract a different group of customers if they are to thrive, not just survive.

To provide help I’ve put my experience into ‘The Wellness Asset’. This is a practical book, full of essential information for any hotel owner.

The aim is to show hoteliers, even the one who are sceptical, that wellness does make good business sense. And that even if your property is midscale or in the centre of a big city, incorporating wellness into it in a coherent and meaningful way will yield substantial dividends.

Traditionalists vs Hoteliers of the Future

Amongst traditional hoteliers ‘wellness’ is often considered an amenity, rather than an asset that can be the pivot your business needs to enable you to generate significant profit – across the entire hotel.

In the course of researching this book I met some truly inspirational hoteliers. 50 passionate men and women who are leading the way, seeing wellness as a core part of hospitality.

These hoteliers of the future are pivoting, adapting and thriving by building and leveraging their wellness asset to enhance their guests’ overall experience in their hotel.

And these passionate men and women know that the only way they can transform their guests’ wellbeing is through the wellbeing of their teams and surrounding community. They attract people who think alike, and they get their teams excited about their vision and the positive impact of their meaningful work. They create a growth environment where wellness is at its core.

These hoteliers of the future are forward-thinking, audacious and legacy-oriented, with a vision that stretches far beyond short-term profitability.

Leveraging the hotel’s wellness assets

Many leading hotels have been transformed by leveraging their wellness assets using the ‘ESSENCE’model I have developed, which takes you from assessing potential ideas to implementing and honing your offering to give your guests an experience so good they will do your marketing for you – in months, not years.

When we thoughtfully and meaningfully consider wellness within all our guest experiences, that is when the magic happens. The healthy breakfast tailored to the needs and tastes of each guest, the ergonomic pillow and mattress to ensure a good night’s sleep, the soothing scent to encourage relaxation, the surrounding vineyard to walk through or practice yoga, the lovely massage to release those tensions, that amazing glass of wine or that lazing around and doing absolutely nothing while your children are being entertained. Every one of these small details are part of our guests’ wellbeing. Each detail impacts them in ways that make them feel both energised and refreshed. And helps them to put their problems into perspective so they can live their lives in a more fulfilling way.

About Sonal Uberoi

Sonal Uberoi is a global wellness expert and founder of Spa Balance, a boutique consultancy working specifically with hotels to help them tap into the full potential of their wellness offering. Sonal has worked with major hotels across the world enabling them to attract a more discerning guest, build a loyal and committed customer base, attract and retain quality talent and increase profitability, without breaking budget.

Her book The Wellness Asset is now available.

The Opportunity in Angel Investing

Posted on June 23, 2021 Written by Administrator

For many of us angel investing may feels inaccessible, an option for the multi-millionaires or industry titans we see on shows like Dragons’ Den. As a result, instead of exploring this exciting asset class, we put our investments into options we are more familiar with – safer options such as stocks and mutual funds.

But the reality is that angel investing is something more people should consider. If you have capital to invest, angel investing is an option you should consider. Like all investments it does carry risks, but it also offers potentially exciting rewards.

Here we will cover the basics and importantly explain how angel investing can offer potentially higher returns than many of the more traditional and familiar investment options.

What is an angel investor?

Angel investors invest their personal capital into unlisted businesses in exchange for shares in that business. More than just cash, angels typically offer wider benefits to investee companies in the way of mentorship, advice, acting as a non-executive director or making vital introductions to their network of contacts.

Most angel investors are classed as ‘High Net Worth Individuals’ (HNWI). It is this terminology that likely conjures up the images of three-piece suits, designer watches and luxury cars – making angel investing feel inaccessible. The reality is that to be considered a HNWI, you need an annual salary of at least £100,000 or net assets, excluding property and pensions, worth £250,000. That’s more people, than you’d think – at least half a million in the UK according to Statista.

The other common type of angel investors is termed ‘Sophisticated Investors.’ To be classed as sophisticated, you must either be a member of an angel network, have invested in another unlisted company in the last two years, have worked in a professional capacity in the private equity sector or be a director of a company with an annual turnover of £1M+.

Business angels will usually put in between £5,000 and £500,000 in a single venture and will aim to build a portfolio of investments over time.

Potential returns

While angel investing is riskier than other asset classes, and is less liquid, it does have the potential to offer greater returns.

Data collected in the US in a 2017 Willamette University study on angel investment returns calculated that the average return for angel investors is 2.5X, which alongside an average investment time span of 4.5 years indicates a gross internal rate of return of 22%.

This compares very favourably with more traditional investment vehicles:

Mutual funds – Not even the best performing mutual funds of all time will break 20% average annual return, and most of them will not go over 15%;
Index funds – Industry favorite, the S&P 500 has provided an average annual return of 13.6% since its inception;
Bonds – During the pandemic, UK interest rates on bonds have been cut to 0.1%;
Stocks – The average return on a Stocks and Shares ISA in the UK is 5.14% (April 1999 to April 2020).

A more recent study by FounderCatalyst published in January 2021 showed that angel investments yielded an average 2.77 X return. Furthermore, with the additional benefit of EIS tax relief that grows to an average 3.19 X return.

Under the HMRC’s Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS), angel investors receive income tax relief of 30-50% on funds invested in startups and early-stage businesses. This fantastic scheme has helped to raise £1.929 Billion for 3,920 companies yet is still surprisingly unknown to many potential investors who could benefit.

It is worth pointing out here again that averages are averages. Any experienced angel will tell you that many companies take much longer than 4.5 years to mature and exit, and more fail than have home runs. But, on average, angel investing appears to perform well in the long run versus other asset classes.

Why become an angel investor

Yes, it makes financial sense to invest in early-stage companies, as they can provide an unparalleled rate of return on your investment, and you can take advantage of generous tax relief schemes.

But many do it for more altruistic reasons. As an angel investor you offer value to a young company not just in the form of hard cash, but also in the form of advice and a strategic direction stemming from your experience. Typically, angels are evangelists for the businesses they support – be it the use of big data in medicine, the implementation of AI in charity/corporate matching, or the development of energy saving computers. And everybody loves to hear about the little business you invested in which is about to be merged into a billion-dollar Special Purpose Acquisition Company (SPAC).

Developing a portfolio

According to the Willamette University study, angel investors get positive returns less than half the time they invest in a company. In fact, they register losses on around 70% of investments, and just 10% of their exits generate 85% of all returns. Diversifying your portfolio is key when trying to improve your return rates.

Looking at the rate of return on original investment of 300 exits from 2018/19, the data shows that angels’ odds of significant returns increase with the number of investments. The FounderCatalyst report states that a portfolio of investments in three companies is likely to yield, on average, worse returns than a portfolio of investments in 10 companies.

However, unless you are Dragons Den’s Deborah Meaden or Peter Jones, opportunities may not always come to you. In fact, having enough deal flow to increase and diversify your portfolio can be a challenge.

One solution is to join an angel network. Well-established and properly regulated networks have investment specialists pre-screening deals, ensuring information is clearly and fairly presented and curating opportunities based on your interests. A good network will be listed on the Financial Conduct Authority (FCA) register and will follow FCA guidance which is all intended to help minimise risk.

Investors that join a network:

Gain access to deal flow;
Lower their risk by receiving support in the due diligence phase;
Diversify their portfolio;
Join a community of like-minded investors;
Can make a more meaningful and more sizable investment through syndication.

According to research firm Beauhurst, the most active angel networks in the UK right now are:

In most cases, there is no need for a recommendation in order to gain access to investment networks. Angel investing is available to you from the comfort of your own home, as the most active networks, like Envestors, will use digital platforms to share their opportunities.

I hope you can see that there is opportunity in angel investing for you to consider.

ABOUT THE AUTHOR

Gavin Heys is director of Envestors Private Investment Club where he works closely with investors to help them find the right opportunities for their portfolio. He has raised over £15m for companies including Draper and Dash, Censornet and F45 among many others.

Envestors’ Private Investment Club and digital investment platform bring together entrepreneurs and investors across geographies, communities and sectors – creating the single marketplace for early-stage investment in the UK.

Founded in 2004, Envestors has helped more than 200 high growth businesses raise more than £100m through its own private investment club.

Envestors is authorised and regulated by the Financial Conduct Authority.

Web: https://www.envestors.co.uk/

LinkedIn: https://www.linkedin.com/company/envestors-llp/

Twitter: @EnvestorsLondon

There’s Money In Keeping Property Development Small

Posted on June 9, 2021 Written by Administrator

If you are considering property as a potential investment opportunity, career path, or part-time enterprise, there are a variety options available. Small-scale development is one area that an increasing number of investors and landlords are moving into. It can be lucrative, and a lot less scary than many people imagine.

What do we mean by small scale?

Typically, you would be building somewhere between four and 20 flats and planning to make a minimum 20% margin on what you sell them for. As an example, let us assume you started small and converted a small shop, office, or commercial building into four flats which you then sold for £150,000 each, then you would expect to make a profit of £120,000. If your next project saw you convert 12 flats, based on the same numbers, you would make £360,000. In development terms, that is relatively small beer, but compared to the long game that is buy-to-let or a graft-intensive doer-upper, nice numbers.

Why is it so lucrative?

Converting unloved commercial property into attractive residential units generates a significant premium, particularly in a market where so many owners of commercial properties are financially challenged. And in my 40 years’ experience, relatively few developers know how to convert properties well.

Is there a great deal of work involved?

As there is more money involved compared to a flip (a small project where savvy DIYers and bargain hunters freshen up run-down homes and flip them on for a profit), developers can afford two things that make their lives considerably easier.

The first thing you can do is hire a Project Manager. The Project Manager’s job is to oversee the development for the developer. Worried you might be out of your depth (or get exasperated), turning up on-site to manage architects and contractors? Well, your Project Manager will do this for you. A highly experienced set of eyes and ears managing things on site, looking after your interests, and reporting back to you regularly.

Secondly, developers can also afford to hire a main contractor. Where flippers and doer-uppers make do with a general builder and then employ many of the other trades directly, a small-scale developer uses a contractor who is responsible for all of the trades/subcontractors. This makes life considerably easier since there is only one relationship to manage, and the contractor then coordinates all of the construction team.

Additionally, because you have a main contractor AND a Project Manager, you do not need to oversee everything yourself—you play the role of CEO instead of being a hands-on-newbie-project-manager—leaving you with more time than if you were involved in a smaller project where you frequently need to be on site. In fact, most small-scale developers oversee their projects in their spare time.

What skills do you need?

Your critical job as the developer is to create your own development ‘brand’, pull a team together, get the finance sorted, and then find profitable deals. And, of course, you need to be able to make decisions under advisement from your professional team since you are the ultimate boss. It is very much like the role of the CEO, and as such, you need to have solid organisational and management skills, as well as good interpersonal and communication skills. I would never tell anyone that property development is easy, but many people already have the generic core skills to be able to do it successfully. And to correct another popular misconception, you typically need to invest less of your own money in a development than you might think.

Remember there is risk

There is a reason why property developers take the lion’s share of the profit, while everyone else gets a fee, and primarily it is all about risk. There is no getting away from it – property development has many moving parts and is inherently risky. But, if you get yourself educated, it is possible to de-risk the development process significantly. It is the people who ‘jump in and go for it’ who tend to come a-cropper. I have certainly trained many developers who had learned the hard way that they did not know what they did not know.

The government recently announced a whole range of Permitted Development Rights in England, making it possible to convert many commercial buildings without needing full planning permission. These rights come into effect from August 2021, so the timing could not be better to take a long, considered look at the opportunities offered by small-scale development.

ABOUT THE AUTHOR

Ritchie Clapson CEng MIStructE is co-founder of propertyCEO, a nationwide property development and training company that helps people create a successful property development business in their spare time. It makes use of students’ existing life skills while teaching them the property, business, and mindset knowledge they need to undertake small scale developments successfully, with the emphasis on utilising existing permitted development rights to minimize risk and maximize returns.

https://propertyceo.co.uk/

https://www.facebook.com/propertyceotraining/

https://www.instagram.com/propertyceotraining/

https://www.linkedin.com/company/propertyceo

What does the decline of iconic retailers mean for early-stage investing?

Posted on May 7, 2021 Written by Administrator

We’ve recently seem the demise of several iconic high-street retailers. Something that would once have seemed completely unimaginable.

For example, Debenhams with its two hundred plus years of history, and the younger Top Shop, often described as the jewel of the high street, both found they could no longer compete and fell into administration.

Evidenced by the calls to save the high street, it is well recognised that the way we shop has forever changed. We’re shopping online while in bed, at work and for 20% of us– from the bathroom.[i]

But, what does that mean for early-stage investing?

It’s easy to write this off as consumer behaviour that has nothing to do with investing. However, that would be short sighted.

Purchasing decisions begin online

Whether you’re a B2B buyer or a consumer, the buying process begins with online research. A Google study confirmed that 92% of people begin their buying journey online. That leaves only 8% wholly reliant on other means to investigate purchasing decisions.

Do angel investors fall into the missing 8%?

A PWC study found that 98% of them use the internet daily^[ii] and for up to three hours. Beyond this, a second study by Accenture Consulting^[iii] confirmed 83% use digital for financial services. Both of these studies are several years old, and it is reasonable to assume that the use rates of digital have increased since then.

So, if you’re a network promoting investment opportunities and you’re not using the online channel, you are missing out on a key phase of the investors’ journey.

Forget customer loyalty

Networks which don’t offer the convenience of an online channel to their investors may believe that it doesn’t matter; your investors have been with you for years and are loyal.

Another look at retail proves that there is no such thing as customer loyalty.

The loyal customer base that Debenhams and Top Shop built up, slowly trickled away as new digital-first players came in and offered a better, more tailored experience.

It’s easy to blame the pandemic. But the truth is that Covid-19 was but the last nail in the coffin for these iconic retailers. Both were struggling before Jan 2020. The reason: they weren’t giving their customers what they wanted.

Generations grew up, times changed, new savvier players like Asos, came into the market – and their once-loyal customers left.

Customers are only loyal for as long as it suits them. If something better comes along, they will move on.

What we’re seeing in the early-stage investment market is a number of new digital-first investment clubs like the Envestors Private Investment Club, Angels Den, or Chorus. These next-generation investment networks are the Asos of the investment space. They understand that investors want always-on, self-service access to deals and they are ready to deliver.

Building relationships on shared interests, experiences and data

The retail giant Amazon, for example, knows more about its customers than they’d probably be comfortable with. They collect data from every interaction, and use it alongside trend data from other customers, in order to help users make buying decisions.

Can angel networks say the same thing?

Do you really know what your investors are interested in without taking advantage of all the options digital has to offer?

Investment networks are reliant on face-to-face interaction and personal relationships. Now, relationships are crucial to early-stage investing. But data can be used to empower your existing relationships.

With online platforms you can collect data on investor interests – both those they state explicitly and those you can infer based on their online behaviour. This data, at both the individual and macro level, can be invaluable to you in catering to their needs.

Another application is in deal selection. With data on which deals are getting the most engagement you can start to look for similar deals to bring to your investors.

A changing market

The early-stage investment space is a traditional one – for now. But as we saw in the retail example, traditions can be supplanted as quickly as a Prime delivery.

Many factors drive an industry to change. In the case of early-stage investing it will be the core players in the market. That is the investors and the companies raising finance. They are getting more and more used to a digital first experience and the investment clubs that serve them need to stay one step ahead of their needs. When this doesn’t happen, heritage organisations fall, and new giants emerge.

Needs have undoubtedly changed. We are at a point where people expect an always-on, personalised service. They like to be empowered to do their own research and to drive their own agenda and without a digital offering they have to wait. Today, no one expects to wait.

Traditional networks need to take action or find themselves falling behind their newer rivals who have digital offering catering to the needs of today’s investors.

ABOUT THE AUTHOR

Envestors partners with accelerators, incubators and angel networks to provide a white-label platform empowering them to promote deals, engage investors and connect to other networks.

Founded in 2004, Envestors has helped more than 200 high growth businesses raise more than £100m through its own private investment club.

Envestors is authorised and regulated by the Financial Conduct Authority.

Web: https://www.envestors.co.uk/

LinkedIn: https://www.linkedin.com/company/envestors-llp/

Twitter: @EnvestorsLondon

[i] https://kinsta.com/blog/ecommerce-statistics/

[ii] https://www.pwc.com/sg/en/publications/assets/wealth-20-sink-or-swim-gx.pdf

[iii] https://www.accenture.com/t20150703T033306__w__/_acnmedia/Accenture/Conversion-Assets/DotCom/Documents/Global/PDF/Dualpub_17/Accenture-High-Net-Worth-Investors-Gen-D-Europe.pdf

How to fall back in love with your business

Posted on May 6, 2021 Written by Administrator

Your business determines the person that you are and the life that you live. Yet, for so many of us, the organisation in which we work is our enemy, not our friend.

Every day, I work with business owners who are frustrated, resentful and overworked – I have been that business owner myself. These executives are never the most profitable, the most effective or the most fulfilled in their business.

I can trace a clear pattern in my business journey; the times when I have been at conflict with my business have, without a doubt, been the hardest. The treadmill of productivity and output becomes draining and makes it easy to lose sight of why you started in the first place. During these periods, I have inevitably found myself less effective, lacking in motivation and surrounded by negativity. I have also been making less money!

In 2015, I made a very specific decision. I was going to build and sustain an environment of total motivation in my business. I was adamant that I would develop a relationship with my business that was functional, happy, mutually beneficial and filled with love. I wanted to run an organisation that I always spoke about kindly and provided an environment of support for everyone within. I aspired to create a business that people were drawn to because of its deeply attractive culture. It would allow me to attract the best staff, win the best clients, align with the best partners, and ensure that I worked with purpose and passion every day. My business was going to be the kid that EVERYONE wanted to hang out with.

Thankfully, I had worked in and with over 400 businesses, and I had a lot of insights to support my approach. Elation Experts – the organisation I have today – is my happy place. I have built this relationship through 3-key principles.

When taking control of your professional destiny, you need to focus on these three areas. Doing exactly the right amount of the following will ensure that you fall back in love with your business and you create somewhere that everyone else can love too.

What do you put in?

One of the key drivers of the human condition is our desire to add value. We want, perhaps even need, to know that the impact we have is positive. We want to be recognised. We want to know that our talent is influential. We grow when we contribute, so focus on this every day. If your business is a place where everyone has a chance to shine and contribute in a meaningful way, you create a powerfully positive environment.

Ask yourself and encourage your team to ask questions like:

What areas of the business can I improve on today?
Where do I have a really positive impact, and how do I ensure I use that influence regularly?
How can I harness and encourage the strength of others?

A wonderful business plays to the strengths of every team member. The great communicators lead the meetings, and the fantastic innovators contribute to new ideas. Have you identified the strengths of yourself and your team? Are you making the most of those strengths?

Make sure that you speak with everyone in your team regularly to give them the boost they need. This allows you to have a real impact and witness the tangible results in daily business operations.

Consider each team member, including yourself, and think about their strengths. Now look at whether that person is doing work that plays to that strength. Are they in a position that allows them to contribute that strength to the business? If they aren’t, then look at how you can change this and help to give them work they will feel is making a positive impact.

Look for ways to feedback to team members how their contribution is making a difference to the business. Everyone likes to understand how they fit in and how what they are doing means something in the bigger picture.

Purpose is a great motivator. By helping people see the value they add when they are at work, and understand the benefit they are bringing with their skillset, you will automatically motivate them. As a business owner you must not only ensure that you personally are adding tangible value but also that every person in the team has a chance to shine.

If you can give and create a sense of purpose in your business, you will thrive.

What do you get out?

Growth and development are key measures of human success. For some, this might be hitting a target, or learning a new skill. For someone else, it might be repairing a broken item or creating a new recipe. We measure development in very different ways, but without it, we stagnate. A business in which all members can realise their potential is one that attracts the best.

The questions for your business and your team are:

What personal development will make me more powerful? (Training/Coaching/Mentoring)
How can I stretch my team to ensure that they grow every day?
How can we create a culture of feedback that means everyone’s potential is realised?

A business that has a culture of personal development, layers learning on even the smallest of tasks. It embeds personal development planning, individual training budgets and plenty of extracurricular opportunities.

Every week, ask your team to report on the three biggest barriers to success, and find a way to develop the team in order to overcome those barriers.

Consistent improvement is highly motivating – for you and your team. If something motivates you, it’s difficult not to fall in love with it. So, make sure your business is motivating everyone involved in it.

Where do you get your energy?

Running on empty is the quickest way to failure. Often professionals who are not seeing the results they want continue to push harder: a recipe for burnout. Resting is not seen as a productive way of achieving more. But being full of energy creates an environment of success. If you get a sense of joy and balance from your work, you perform far better.

These are the specific questions you need to focus on to ensure you and your team are efficient and enthused:

What is the best way for you to relax and de-stress?
How can you make sure your team are recharged daily?
What signs will tell you that a team member is overworking and underachieving?
How comfortable do people feel about asking for support?

Keeping your business full of energy guarantees sustainable output from your team. This requires agile working – allowing your team to work on key tasks when their energy is high, and permitting them to step back and recharge when required.

For my team, taking 15 minutes to meditate at lunchtime or running/walking meetings make a huge impact. If deadlines are heavy, we will stop for a full hour and have a team lunch before addressing the task with full commitment.

Resting makes us strong, and I recognised that when I started permitting myself to stop, I became much more effective. The same applies to everyone on the team – they need rest, and they perform better for it.

I love my business. I wake up every day knowing that I am going to spend my day doing things I love, that add value, with a team of people who feel the same. I have a purpose, I feel successful, and I know the future is bright.