Since the financial crisis of 2008, there has been an acknowledgement that the banking system would never be the same again. On one hand, the days of easy access to cheap debt have come to an end. But as the economy has grappled with recession and low growth, the dilemma for businesses has been that those who want to grow often can’t get capital to expand.
In a recent survey by Deloitte, it was revealed that the most likely source of funds to grow a business were from retained profits, not from increased lending or venture capital.
Part of the underlying reason behind this has been confidence. Businesses are in perpetual fear of a prolonged downturn.
So, it was with some delight that I digested the news that a Grant Thornton/ICAEW survey has found business confidence to have grown this quarter. It may mean that the impact of a rise in business confidence steers the economy out of a triple dip recession.
According to the survey, the Confidence Index is up +12.8 points, from +4.2 in the last quarter of 2012. The survey has closely tracked GDP and this suggests a 0.4% rise in GDP in Q1.
What should please us all more than ever is that the improvement is across all the key areas where GrowthAccelerator sees opportunities. It’s in areas like exporting and innovating; that confidence also isn’t just restricted to the regions and cities where you’d expect it to be high; it’s also strongest amongst smaller and medium sized firms.
But while confidence is high, the issue confounding venture capitalists, business angels and private equity investors is the poor quality of the submissions they receive. They emphasise the importance of forecasting properly, and providing the right kind of cost analysis. This, they say, is the only way to provide a would-be investor with the comfort that this is an investable proposition. This is one of the reasons why an experienced coach with experience and knowledge in finance and in fundraising can help a business.
But no business is even going to attempt to raise funds to grow, without the confidence that the conditions are right for their business and that the opportunities are real. And ten per cent per cent of companies in Grant Thornton’s survey felt their businesses still needed better management skills in order to really grow. Partly that’s down to recruitment – but also about getting the right kinds of leaders in place in a business that is looking to grow.
It probably seems timely then to remind you all before I sign off, that additional funding is available for businesses on GrowthAccelerator for Leadership and Management coaching. They will provide match funding of up to £2000 per senior manager, a benefit which hundreds of businesses are taking advantage of, and experiencing a direct positive impact on their business. Not only that, but it gives the whole team renewed confidence and optimism, which is key to making business ambitions a reality.