With Alpha Financials working as your trusted and independent partner, our wealth of financial and commercial experience spanning a variety of industries, ensures you have the information and team support needed for your business to thrive – from the confidence to capitalise on new opportunities, to solving financial problems, or simply just to bounce some ideas around – we are always at your service.
How to Raise Money
Clearing the hurdle of deciding you need to raise capital is a big decision – but it’s only the start. The path to raising capital is rife with pitfalls. For instance, where do you begin to look for the source of money? Do you go to a regular High Street or specialist bank, a venture capitalist, a business angel, or dig into your own pocket?
Alpha-Financials knows what is required for each of these options and will ensure you get the appropriate outcome and the best financial deal.
Key Factors to Raising Capital
The two crucial success factors when raising capital are:
To choose the correct option for your particular circumstances (it really is a jungle out there!).
To fully understand the requirements of your choice (as each differs substantially).
Your decision should be based on a professional analysis of your balance sheet, future cash flows and the nature of your business. This will let you choose between such funding options as:
- bank debt
- venture capital
- peer-to-peer lending
Alpha-Financials’ experts can guide you through the entire process and share their knowledge & experience, the advantages and disadvantages of each of these options and recommend the best option – or combination of options – for raising finance for your business.
How to Raise Money the Alpha-Financials Way
Why is Alpha-Financials your ideal partner for raising capital? It’s our understanding of the lending process, how it applies to the SME market and our expert financial tools. Combined, we have an insider perspective on how best to approach financiers and how and when to prepare your funding request information documents.
As a minimum, the following should be in your information documents:
- Details of your business
- Past financials
- Overview of the purpose of the loan
- Forward projections
These are all rather obvious areas to report on, but of paramount importance is how they are assembled and the underlying quality of them – something we have considerable experience of and expertise in. The importance of first impressions can’t be stressed highly enough here and you might only get one chance with particular investors or lenders
Alpha Financials is not aligned-with, contracted to, and does not act as an agent, advisor or sponsor for any specific peer-to-peer lending network or organisation. Instead, we will pursue the funding source best suited to your needs.
Your business finances are disorganised and/or your business faces solvency issues.
You might be at the point where you just don’t have the time, energy and/or knowledge to manage both the financial and operational aspects of your business.
Alpha Financials suggest a two-staged financial outsourcing process for moving your business from mess to success:
Stage 1: Get back on track and ready to move forward.
First, you need a high-quality bookkeeper. Your day-to-day standard bookkeeping will be outsourced for an average of two or three days per month.
From the outset, our accountant will implement a proper financial reporting system, OR we work with your accountant to do so.
This process is critical to understanding the underlying business and thus will evolve over a period of time – this varies between situations, but typically could be from one to six months.
The system establishment and your outsourced accounting work will average around two days per week and result in:
Reports that provide you with a clear understanding and management of cash, ensuring that you keep on top of things and if relevant to you – keep any threat of bankruptcy at bay. It will also allow you to understand and make sensible decisions about such matters as working capital management.
The production of regular breakeven reports, clearly indicating the level of sales required to cover your base expenses and outlining the required steps to progress towards your overall targets.
Finally, to assess your business’s overall financial structure and to suggest how to increase profits and improve risk management by better integrating finance and operations, we offer the services of one of Alpha Financials’ expert interim finance directors, typically for two or three days per month. The director will be there to provide overall financial guidance and strategy, analyse financial performance and offer wise financial advice in relation to any questions or ideas you may have.
In this type of scenario, most of our financial outsourcing services are ‘frontloaded’, meaning more days will be spent earlier in the process and slowly decrease as the process moves forward.
Stage 2: Make your finances work for you
We suggest a continuation from our recommendations under stage 1 by having your financial services outsourcing include a bookkeeper for about two or three days per month.
Alternatively, once the process is established we can hand it over to your existing staff, or even split the workload – an attractive option for those who prefer that internal staff do not have access to all sensitive company data.
After a short period of time, the outsourced accounting (2-3 days per week) and the interim finance director (2-3 days per month) will provide on a regular basis, a full set of management accounts.
This ensures the full integration between finance and operations and thus will improve the business’s performance, cash flow and profitability.
Beyond all other requirements, making sure you have the right information at the right time is paramount on any road to recovery. This new found timely and accurate financial information empowers you by producing the so-called ‘balanced score card’ that clearly shows how the business is performing TODAY and a clear path ahead for how it will perform TOMORROW and BEYOND.
Correctly pricing a bid is the key to securing your future, but this requires balancing complex trade-offs between competitiveness, risk management and profitability.
At the same time, you have to choose between different options, each having different risks, durations and cash flow profiles. Needless to say, the project appraisal process is anything but straightforward. Why risk your future, when you could leave the navigation of this difficult task to someone with the experience, specialist skills and resources in investment appraisals that you really need?
Our CAPITAL INVESTMENT and PROJECT APPRAISAL Solutions
Investment Appraisal Mismatch
In a bid situation where there is a mismatch of revenues and costs, pricing your offer and making sound capital investment decisions can be a complicated matter.
Similarly, investing in a new project or buying new equipment typically requires a large up-front spend. Whilst this could put a strain on your available cash resources and may require you to secure additional financing, it also creates a unique opportunity to transform your business.
Alpha Financials provides the solution to these and other scenarios, ensuring business owners know how to value these opportunities. This means understanding the likely returns, how risks and returns can influence them and in the case of a bid, what price will prove competitive whilst also ensuring good returns into the future.
Based on our extensive experience in investment appraisals, our assessments deliver you the keys we believe that any effective appraisal should contain:
- A minimisation of risk and bias by using a standardised and independent approach
- A revealing and explanation of all the underlying assumptions and their potential impact
- Identification and quantification of the impact of critical success factors
- A robust & reliable model that brings all factors into the appraisal and acts as a bridge between finance and non-finance staff
“As MD with many staff and a hectic schedule, I like Alpha-Financials as a personal, part-time finance colleague, acting as an independent sounding board for my projects. They provide excellent analytical skills to help me take the right decisions”.
Ian Cleveland – MD, Verify Solutions Ltd
Why Alpha Financials’ Capital & Project Investment Appraisal Service?
- We have an extensive array of investment appraisal experience across a variety of business sizes, industries and countries
- Our exceptional financial model strikes the right balance between simplicity and complexity – making investment appraisals accessible to all
- Two for one: To ensure quality, at various key points of the capital investment appraisal, your dedicated Alpha-Financials’ project manager will be assisted by another senior staff member.
- We deliver a true FTSE 100 professional approach, but stripped of bureaucracy and unnecessary overhead – reconfigured for the SME market.
If you’re making a Capital or Project investment decision and asking yourself:
How should I price my bid?
What rate of return can I expect while remaining competitive?
How should I factor in my risks and opportunities?
What’s better: high up-front + low variable costs or low up-front + high variable costs?
Should I invest in project A or project B?
Should I lease or buy this asset?
What impact will the project have on my balance sheet?
Then your answer is Alpha Financials.
How to properly Value a Business
Valuing a business correctly largely depends on why you want to have a company valuation in the first place. Whether you’re negotiating with prospective buyers, buying out fellow shareholders, supporting an employee share option scheme or for other HMRC purposes such as family involvement or even divorce settlements, Alpha-Financials will match an independent company valuation to the specific situation you have.
This is important to note, as there are many valuation methods available to a business – so choosing the right one is crucial. These different methods can lead to widely different valuations, so it is essential you match the optimum approach with the particular situation and company valuation needs.
The most common question to start is ‘how much is my company worth?’ To know this, you first need a clear insight into the entire company valuation ‘picture’.
Although a single figure will eventually be required for contractual purposes, it rarely makes sense when you are first trying to understand how to value a business in a very uncertain world. Establishing the background allows for a far richer picture of the business to be established, which is crucial to achieving the highest sales price possible. Interestingly, using this technique, not only do potential buyers receive a better understanding of the business, but often the business owners gain new insights into the true value of the assets they have – which translates into additional confidence in asking for a higher price in negotiations.
To see the whole picture, Alpha-Financials uses five key guidelines for valuing your business in a credible and meaningful way:
- Your company valuation is led by a team of qualified & experienced valuation professionals.
- We create a high quality analysis that pinpoints what drives the value of your business, and within this, a sensitivity analysis is customised to your particular needs.
- We adhere to tried and tested company valuation principles, but go a level beyond this by recognising their imperfections and allowing relevant adjustments.
- We recommend taking external market measures of bigger yet similar businesses, which in turn allows us to provide excellent indicative company valuation metrics for comparative and/or justification purposes.
- We ensure that the integration of internal data, external information and value drivers is comprehensive, so you are then armed with a full “picture of value”. This picture recognises the inherent uncertainties of the company valuation process and as such is far more valuable than a simple ‘single number’ outcome.
“Business and project valuation has historically been based on the views of a few strong managers and subjective factors. Today, modern businesses need more, and Alpha-financials approach and methodology promote a logical and systematic approach to the discipline.”
Maria Land, CIMA Chiltern Branch
Why Alpha Financials for your Company Valuation or Project Valuation?
When it comes to determining how to value a business or a project, Alpha-Financials distinguishes itself from standard company valuations because:
- Our wealth of experience in the corporate, banking and SME world lets us quickly understand the needs of you AND your counterparty, be it a buyer, seller or financial institution.
- Our company valuation tool was developed in-house and has been tried and tested on a wide array of sophisticated and individually tailored company valuations. It removes the need for you to purchase or build costly financial tools and removes the pitfalls associated with often inflexible, off-the-shelf packages or overly simplistic profit multiples that are often favoured by accountants.
- Our outputs ensure your valuation not only looks professional, but is comprehensively backed up by meaningful analysis. Our company valuations include clear summaries of major outcomes, the all-important underlying assumptions and an overview of all sensitivities.
We know that the financial knowledge required to run your SME on a day-to-day basis is very different from the knowledge you need when deciding how to value a business. Alpha-Financials closes this divide by minimising the financial uncertainties typically encountered when valuing a project or company.
Company Valuation: What you get
With our standard company valuation, you will receive:
- An initial face-to-face review of all relevant internal financial and operational information
- Research of relevant external market data
- An initial draft company valuation based on Alpha Financials’ business valuation model
- Interactive session for shaping the company valuation based on testing the sensitivities and assumptions
- Finalisation of company valuation model and comprehensive written company valuation report
- If required, a follow-up consultancy with one of our specialists, for example to assist presenting the company valuation to a third party
In Summary: How to Value a Business:
If you’re asking:
How much is my business worth?
Can I buy my partner out?
Is it time to sell up and retire?
Is my partner offering a fair deal?
Does it make sense to merge our businesses?
Then your answer starts with speaking to us at Alpha Financials.
M&A without the stress, pain or headaches – YES, it is possible!
If you are considering the sale of your business, or the purchase of another – whether in part or a complete buy-out, Alpha-Financials’ in-depth experience of M&A transactions ensures you sell or buy at the best possible price, within an agreed completion timescale.
More so, our comprehensive menu of project financing services means you save time – and money!
Our Merger & Acquisition services in detail:
- Start-up phase of investigation
- Establish objectives, determine timescales and create a plan
- Commence profit improvement plan (when necessary)
- Produce professional business plan / Information Memorandum
- Complete an internal valuation
- Conduct market research to determine potential buyers
- Contact all potential buyers with outline information
- Sign confidentiality agreements and distribute detailed information
- Seek initial bids
- Agree on shortlist of best potential bidders
- Undertake due diligence and negotiate with shortlisted bidders
- Seek best and final offers
- Draw up Sale and Purchase Agreement plus Representations and Warranties
- Close the deal
Our proven, specialist valuation model provides you with an independent check against submitted bids and brings a professional credibility to the negotiation process.
What you get:
- Guidance through the financial planning process, with a clear timeline of deliverables
- An independent business valuation benchmark
- Research, analysis and contact with potential bidders
- Organization of, and advice on all relevant legal and tax issues
- Assistance with negotiations, implementation and presentations
- Use of our tried and tested financial model – so there is no need to waste time and money building or buying your own
If you’re asking:
How do I sell my business for the best price?
How do I sell my business whilst running it – and keep my sanity?
How would I buy out my competitor and at what cost?
Then Alpha Financials is your answer.
Increase your profits by finding your business’ hidden cash
What is hidden cash?
This is money trapped in your business today and released without extra sales tomorrow. The effort required to get it is minimal compared with the benefits, but if you don’t use it, you lose it.
Benefits of finding it:
- Receive more cash
- Increase profitability
- Reduce your overdraft
- Improve your marketing
- Increase the chance of hitting your targets
- Take better decisions, quicker
Owners don’t find it because they:
- Are tied up with their operations
- Fail to see what they are missing
- Lack the time for the necessary work
- Don’t know how to get it
Examples of Hidden Cash:
- By understanding the true costs of his different services, one client now prices what he does far more accurately, thereby increases profits.
- With our assistance, a client with a £1m p/a business reduced debtor days by 2 weeks, thereby permanently releasing £20k cash.
- After some investigation of their internal accounting practices, we were able to change the timing of cash-in and cash-out flows, substantially reducing a client’s overdraft burden, which freed up cash within the business.
The Alpha-Financials process:
This three-stepped continuous process is simple and self-financing but requires a very trained eye.
1. It is crucial to identify the right information. This might even already be available in your company but nobody realised its importance or cared to ask for it. Accountants typically do not gather this required information as they naturally collect past data, which is useful but insufficient to take future decisions, which must to be based on future cash flows.
2. The timing has to be right too, as you need to take decisions today that will influence your cashflow next month.
3. Now armed with real transparency about your financial performance which emphases cashflow forecasting, you can target profits and establish the required financial links to physical measures. Remember, the benefits to you and your business include:
A better understanding of your company’s current and future financial position
Improved cash management
Reduced risk for any need of emergency funding or, in the extreme, bankruptcy
Better decision making and improved levels of confidence for yourself, your banks and your financiers.