Small firms looking for big financial backers could soon get the makeover they need to attract the right investor following the launch of a new Small Business Service bidding round.
Organisations can bid for funding to develop pilot projects that will look at the best ways of setting up ‘business salons’. The funding will be taken from the £180 million Enterprise Fund established in 1998.
By addressing the issue of why small businesses find it hard to take advantage of the various equity capital schemes currently available it is hoped more small firms will get the investment they need to grow.
Pilot projects will use workshops, diagnostic reviews and ‘investment grooming’ sessions. Help will be tailored to the needs of geographical areas and individual businesses, and the most successful models are likely to be rolled out to a wider audience.
‘In the last few years there has been a huge growth in the supply of risk capital to small firms. But it is clear that many small businesses with growth potential are missing out on these opportunities because they do not know how to turn their business proposals into attractive investment propositions,’ said David Irwin head of the Small Business Service.
‘The SBS is looking to bridge that gap by supporting a small number of pilot projects aimed at testing the best ways to improve SMEs’ investment readiness. This means that in time, these opportunities will become available to a much wider range of small firms.’
A recent Canadian study of investors highlighted the main reasons why small businesses fail to find investors. These include lack of expertise to turn an idea into a viable business; uninspiring business plans; lack of focus; and absence of a unique selling point.
Copies of the bidding guidance can be obtained from Bill Barrott,SBS Investment Directorate, St Mary’s House, C/o Moorfoot, SheffieldS1 4PQ. Alternatively, telephone 0114 259 7325.