Ask James Caan – 11th April – Issue 43
First, some great news: over 600 people have now recommended Web Recruit and the group has become the 83rd largest globally. With a group of this size, there is a considerable amount of talent, resource and expertise, and I only hope everyone will continue to benefit from it.
Back to the column, and this week I’m focusing on a number of areas I’m really passionate about – small business, funding and social responsibility – all thanks to a letter from Momodou S. Ceesay.
Momodou runs Ceesay Design Solutions, a small logo and website design business in Luton. He has asked me for advice on how to grow his business, both financially and ethically.
‘Small businesses struggle a lot when it comes to finances and mainly depend on grants and personal investments to help facilitate their needs. I am proud to be affiliated with the Prince’s Trust in Bedfordshire, helping to offer placements to unemployed young men and women to get them back to employment.
‘What financial advice can you give for small businesses to try to survive during these tough times?
‘The social responsibility sector of the business also involves voluntary work with my fellow engineering colleagues in building a pico hydro generator to help generate electricity in a small village in my home country. This project involves liaising with a charitable company, Naturel Change (http://www.naturelchange.org/) whose goal is to provide sustainable and affordable drinking water to the residents of rural Gambia’.
Momodou, if I can begin by congratulating you on your success so far. To have got your business off the ground and involved in such great philanthropic activity is a fantastic achievement.
At present, the spotlight is on the private sector and how it can alleviate the pressure of public sector cuts, with a particular emphasis on start-ups. I’m regularly asked about what types of funding I’d recommend, but I really think it should be dealt with on a case-by-case basis.
Banks, typically, are the first port of call for business owners. They can help in a range of areas, including overdrafts, invoice finance, term loans, leasing, commercial mortgage and fixed asset loans. What people may not be aware of is that 80% of business loan applications are successful, the demand for them from small businesses is declining.
Other routes you could explore include:
– non-bank financing, such as commercial loan providers, family/friends, regional growth funds
– Government guaranteed lending schemes
– shares and equity finance – venture capital, business angels, shareholders, MBO
I think what’s most refreshing about your situation is your commitment to social responsibility.
Your involvement with The Prince’s Trust will have shown you just how rewarding it is to work with young people looking to gain extra skills, and your experience with Naturel Change demonstrates the advantages of having a business mind involved in a non-profit organisation.
Over the years I’ve been involved in a range of social responsibility work, and my private equity firm, Hamilton Bradshaw, has invested heavily in projects, including The Prince’s Trust, The Big Issue and most recently, playing a hands-on role, helping families in Pakistan with The JCF.
Writing a cheque is an easy thing to do, but to really succeed in the long term, you need to make sure that the people around you win too. And this mantra extends further than the perimeters of business.
To further grow your business ethically, you should continue doing what you’re doing. Work in partnership with projects home and abroad, and continue to foster these powerful relationships for the benefit of both parties.
Best of luck,