What is finance management

What is finance management?

What is finance management

Finance Management is the planning, directing, monitoring, organizing, and controlling of the monetary resources of an organization. It also includes applying management principles to the financial assets of an organisation, while also playing an important part in fiscal management.

For entrepreneurs raising money from investors your finance management could be the deciding factor, particularly if they are valuing your business using only the internal rate of return (IRR) method. This may result in the investor choosing to invest somewhere else in a company that has a higher IRR.

Internal rate of return (IRR) is the interest rate at which the net present value of all the cash flows (both positive and negative) from a project or investment equal zero. Internal rate of return is used to evaluate the attractiveness of a project or investment.

What is the importance of financial management for your business?

Financial management is one of the most important aspects in business. In order to start up or even run a successful business, you will need excellent knowledge in financial management (the process of planning, directing and controlling financial resources).

The Scope of financial management

The scope and objectives associated with financial management are:

  • Maintaining enough supply of funds for the organisation;
  • Ensuring shareholders of the organisation to get good returns on their investment;
  • Optimum and efficient utilization of funds;
  • Creating real and safe investment opportunities to invest in.

Breaking this down into more detail

  • Creating a Financial Plan:
    • Calculating the amount of capital that is required by an organisation, and,
    • Determining its allocation.
    • A financial plan includes certain key objectives:
      • Determining the amount of capital required;
      • Determining the capital organisation and structure;
      • Framing of the organisation’s financial policies and regulations.
      • Financial control: This is one of the key activities in financial management. Its main role is to assess whether an organisation is meeting its objectives or not. Financial control answers the following questions:
        • Are the organisation’s assets being used competently?
        • Are the organisation’s assets secure?
        • Is the management acting in the best financial interests of the organisation and the key stakeholders?
        • Financial decision-making: This involves investment and financing with regards to the organisation. This department takes decisions about how the organisation should raise finance, whether they should sell new shares, or how the profit should be distributed.

Large companies have departments and staff dedicated to financial management, however, in startups it is down to the founder and key members of the team to take on these responsibilities including:

  • Calculating the capital required:The financial manager must calculate the amount of funds an organisation requires. This depends upon the policies of the firm with regards to expected expenses and profits. The amount required must be estimated in such a way that the earning capability of the organisation increases.
  • Formation of capital structure:Once the amount of capital the firm requires has been estimated, a capital structure needs to be formed. This involves debt equity analysis in the short-term and the long-term. This depends upon the amount of the capital the firm owns, and the amount that needs to be raised via external sources.
  • Investing the capital:Every organisation or firm needs to invest money in order to raise more capital and gain regular returns. Hence, the financial manager needs to invest the organisation’s funds in safe and profitable ventures.
  • Allocation of profits: Once the organisation has earned a good amount of net profit, it is the financial manager’s duty to efficiently allocate it. This could involve keeping a part of the net profit for contingency, innovation, or expansion purposes, while another part of the profit can be used to provide dividends to the shareholders.
  • Effective management of money:This department is also responsible for effectively managing the firm’s money. Money is required for various purposes in the firm such as payment of salaries and bills, maintaining stock, meeting liabilities, and the purchase of any materials or equipment.
  • Financial control:Not only does the financial manager have to plan, organise, and obtain funds, but he also has to control and analyse the firm’s finances in the short-term and the long-term. This can be done using financial tools such as financial forecasting, ratio analysis, risk management, and profit and cost control.
If you would like to learn more about this topic you can find all of the information you need including comprehensive descriptions about every aspect of starting and building a company here.

Why is Financial Management important?

What are the new sources of entrepreneurial finance?

Financial management is important for the following reasons:

  • Helps organisations in financial planning;
  • Assists organisations in the planning and acquisition of funds;
  • Helps organisations in effectively utilising and allocating the funds received or acquired;
  • Assists organisations in making critical financial decisions;
  • Helps in improving the profitability of organisations;
  • Increases the overall value of the firms or organisations;
  • Provides economic stability;

Financial Management is critical to any company, whether small or big and is a vital activity that must be performed in any organisation. Financial management entails the process of planning, organising, monitoring and controlling the financial resources of an organisation. The idea for doing such is to be able to achieve the vision or goals of the company at the stipulated time frame. The goals you should set yourself include:


  1. Ensuring Financial Management is a regular practice in a business environment
  2. Managing a company’s financial resources to ensure there is little or no wastage.
  3. Controlling everything regarding the company’s financial activities which includes the:
    1. procurement of funds,
    2. use of funds,
    3. payments,
    4. accounting,
    5. risk assessment,
    6. and other things that are related to finances.
  4. Ensuring that there are enough funds to carry out production or activities.

They must be set up to follow the best practices, use the required financial management tools and deploy the right strategies to minimize cost and ensure production or business activities function smoothly.

Your end goal when it comes to managing your finance in your business.

Profit Maximisation

To maximize profit while managing the finance of the company with the main focus being that the individual or department handling the financial issues of the company must ensure that the company in question is making sufficient profit.

Proper Mobilisation of Finance

The collection of funds to run the business is also an integral part of financial management that needs to be handled appropriately. Once you have concluded the estimation of the amount needed for a business process, the required amount can then be requested from any legal sources such as debenture, shares or even request for a bank loan. But the point is that there should be a proper balance between the money the firm has, and the amount borrowed.

To Ensure the Company’s Survival

The survival of the company is essential. You must make adequate financial decisions to ensure the company is successful.

Proper Coordination

There must be a proper understanding and corporation among the various departments. The finance department must understand and agree with other departments within the company for the business to function smoothly.

Lower the Cost of Capital

Financial managers also try their very best to reduce the cost of capital, which is something that is vital to the business. They ensure money borrowed attracts little interest rates so the company can maximize profit.

What are the duties of a Financial Manager?

Financial Manager

1.         Financial Planning and Forecasting

  • To plan and estimate the business’s financial needs. He needs to provide details regarding the amount of money that would be required to purchase different assets for the company.
  • To know what needs to be spent on working capital and fixed assets for the business.
  • To make futuristic plans for funds that the company.
  • To determine how funds will be realised and used.

2.         Determination of capital composition

  • Once the Financial Plan and Forecast have been completed, the capital structure has to be decided .The mix of debt and equity used to finance the company’s future profitable investment opportunities is referred to as capital structure.

3.         Fund Investment

  • The financial manager has to ensure that funds made available to the business are used adequately to grow the business. The cost of acquiring the said fund and value of the returns need to be compared and balanced. The financial manager also needs to investigate the channels of the business that is yielding higher returns and improve them.

4.         Maintain Proper Liquidity

  • Cash is the best source for maintaining liquidity. Businesses need to buy raw materials, pay salaries and tackle other financial needs of the company. However, the financial manager has to determine if there is a demand for liquid assets. He also must arrange these assets in a manner that the business won’t experience scarcity of funds.

5.         Disposal of Surplus

  • Selling surplus assets and investing in more productive ways will increase profitability.

6.         Financial Controls

  • Financial control may be construed as the analysis of a company’s actual results, approached from different perspectives at different times, compared to its short, medium and long-term objectives and business plans.


Financial management is a hot topic in the business world because of the importance of finance to the business. The reason for establishing a company is to make a profit and run for many years. However, it’s the financial manager’s responsibility that the finances of the company are used adequately.

If you would like to learn more about this topic you can find all of the information you need including comprehensive descriptions about every aspect of starting and building a company here.

What Does the Term ‘Entrepreneurial Finance’ Mean?

What does the term ‘Entrepreneurial Finance’ mean?

What Does the Term ‘Entrepreneurial Finance’ Mean?

Entrepreneurial finance is the study of value and resource allocation, applied to new ventures and the  questions which confront all entrepreneurs:

  • How much money can be raised?
  • How much money should be raised?
  • When it should money be raised?
  • What sources of funding should be approached?
  • What is my startup worth, e.g. what is its value?
  • How should funding contracts and exit decisions be structured?

The importance of entrepreneurial finance for your startup

Depending on the industry and your goals you may need to attract money to fully commercialise your idea, but who should you approach? You could consider friends and family, a bank, government grants, angel investorsventure capital funds, an initial public offering (IPO) or some other source of financing. Entrepreneurs face numerous challenges:

  • Scepticism towards their business and financial plans,
  • Lack of understanding of your business and its potential,
  • Requests for large equity stakes,
  • Restrictive Term Sheets that spell out the conditions that must be met for that investor before they invest money,
  • Performance hurdles that must be met.

Investors will consider the desire to invest in your business and the risk factors associated with the company and the product or service you are supplying. These will include:

  • Your competition,
  • How you can protect (e.g. Patents, Copyright) your idea,
  • Barriers to entry for other companies trying to copy you,
  • Market size,
  • Political risk (also known as Sovereign Risk) where a government can introduce laws that will affect your business,
  • The strength of your team and its ability to carry out the Business Plan

How do I get funding for my entrepreneur idea or project?

The landscape for entrepreneurial finance, however, has changed over the last years. New players such as crowdfunding, accelerators, and family offices have entered the arena, and several new entrepreneurial financing instruments such as peer-to-peer business lending and equity-like mezzanine financing have been introduced. (Mezzanine financing is a hybrid of debt and equity financing that gives the lender the right to convert to an equity interest in the company in case of default, generally, after venture capital companies and other senior lenders are paid). In addition governments around the world are increasingly considering these new players and instruments as fundamental mechanisms to alleviate the financing difficulties of entrepreneurial firms.


If you would like to learn more about this topic you can find all of the information you need including comprehensive descriptions about every aspect of starting and building a company here.

An overview and comparison of new players in entrepreneurial finance

Venture capital (VC) and business angel (BA) financing have traditionally been advocated as important sources of financing for young innovative firms that find it difficult to access bank or debt finance.

Some of the new sources of finance for entrepreneurs players value not only financial goals but are also interested in non-financial goals such as social goals in case of social venture funds, strategic and technological goals in case of corporate venture capital (CVC) firms, political goals in case of government-sponsored funds, and product-oriented and community-building goals in case of reward-based crowdfunding. In many cases they have different investment approaches, valuation methods or measures, and business models of entrepreneurial financing.

Entrepreneurial finance has changed with the median pre-money valuation of young companies reaching new heights, especially in later-stage financing evidenced by the increasing number of unicorns (private companies valued >1bn US $).

High valuations sound exciting for entrepreneurs however, caution should prevail as a high valuation will put pressure on the founder/s to perform and deliver the results that will give investors a return of several times what they have invested.

The increasing number of startups, new sources of finance, new financial instruments and new ways of valuing a company have combined to make the task of finding the right investor much more difficult.

Some of the new entrants in entrepreneurial finance are shown below:

New player Debt or equity Investment goal Investment approach Investment target
  Active or passive Non-financial support
Accelerators (and incubators) Depends on type of accelerator/ incubator Financial, strategic, political (depends on type of accelerator/incubator) Active Management support, training, network access Early stage start-up
Angel networks Equity Financial Active Management support, network access Early stage start-up
·         Debt-based Debt Financial Passive None Early stage start-up or project
·         Donation-based Social Passive None Social venture or project
·         Reward-based Product-related Passive, Sometimes active Sometimes product testing Early stage start-up or project
·          Equity-based Equity Financial Passive None Early stage start-up or project
Corporate venture capital (CVC) Equity Financial, technological, and strategic Active Management support, technology support Early and later stage start-up
Family offices Equity Financial Mostly passive Little Later stage start-up
Governmental venture capital (GVC) Debt or equity Financial and governmental Mostly passive Little Early and later stage start-up
IP-based investment funds Financial Passive None Patents
IP-backed debt funding Debt Financial Passive IP-based start-ups and established mid-sized firms
Mini bonds Debt Financial Passive Established mid-sized firms
Social venture funds or social venture capital Debt and equity Financial and social Active Management support, network access Social ventures
University-managed or university-based funds Mostly equity Financial and university-related Active Management support, network access Academic and student start-ups
Venture debt lenders or funds Debt Financial Passive None Later stage start-up


What are the new sources of entrepreneurial finance?

What are the new sources of entrepreneurial finance?

Accelerators and Incubators

Their objective is to help start-ups with mentorship, advice, network access, and shared resources to grow and become successful. Sometimes they also offer physical space and financial resources, which often comes in the form of equity. They could be a private company or a governmental institution.

Angel networks

These are a group/network of Business Angels (BAs) who invest together in early-stage high growth ventures providing equity and offer management support and network access. As a group, they can provide higher amounts of financing than individual BA investors.


Crowdfunding is where your company is presented on a platform (website) together with your Business Plan summary and other information with the objective of raising money from individuals.

There are four main types of crowdfunding:

  1. Investment-based (equity) crowdfunding

Equity crowdfunding is a form of financing in which entrepreneurs make an open call to sell a specified amount of equity or bond-like shares in a company on the Internet.

  1. Reward-based crowdfunding

The most typical reward to backers is the delivery of a (sometime customized) product or service, which makes this type of crowdfunding somehow similar to financial bootstrapping

  1. Donation-based crowdfunding

Donation-based crowdfunding is used by individuals or non-governmental organizations raising money for a cause.

  1. Lending-based crowdfunding

Motivations for the crowd to invest are mainly financial as lenders receive fixed interest rates for their loans.

Corporate venture capital (CVC)

Corporate venture capital refers to investments that are made by large, established firms into start-ups or growth firms. Instead of buying a startup they take a stake (shareholding) in innovative young firms, which remain independent, and help them further develop their promising technologies and markets. CVC investors have invested either in later or earlier stage ventures, with their inclination to early stage deals depending on the institutional characteristics of the entrepreneurial finance ecosystem in different countries.

Family Offices

High net-worth families owning large firms increasingly establish their own  family offices  to manage their wealth. Family offices also invest in growth ventures and have evolved into an important player in the market for entrepreneurial finance.

Governmental Venture Capital (GVC)

Many governments have set up programs that seek to foster VC financing, through the establishment of Governmental Venture Capital (GVC) funds, with the aim to alleviate the financial gap problem as well as at the same time to pursue investments that will yield social payoffs and positive externalities to the society.

IP-based investment funds 

IP-based investment funds invest into intellectual property (IP), i.e. patents This way, innovative firms or investors can monetise their IP and use the funds generated to grow their venture. Thus, IP-based investment funds neither provide equity nor debt but acquire intellectual assets of a company.

IP-backed debt funding 

IP-backed debt funding allows firms to exploit the economic value of their IP to obtain loans from banks or other financial institutions IP rights can indeed be used as a source of capital collateralised by the stream of revenues deriving from licensing or royalty agreements, which typically involve portfolios of copyrights or patents. Although these instruments involve high structuring costs, they can be an important component in the funding processes of innovative start-ups.

Mini bonds 

Mini bonds are public bonds issued in special bond segments Mini bonds reflect also the desire by firms to decrease their dependence on bank financing.

Social venture capital funds 

Social venture capital funds provide seed-funding to for-profit social enterprise. The funding can come in both debt and equity, and the goal is to achieve a reasonable financial return while also delivering social impact.

University-managed or university-based fund

University-managed or university-based funds have recently been launched, mainly to support ideas from university faculty, staff, and alumni. These funds are important for getting the technology ready to hand it over to a development partner from the private sector.

Venture debt lenders or funds 

Venture debt lenders or funds are specialised financial institutions that provide loans to start-ups, but unlike traditional bank, financing do not require securities or positive cash flows from start-ups.


The markets for entrepreneurial finance have changed rapidly over recent years. Many new players have entered the arena including debt venture funds, angel networks, and family offices.

  1. Only a small fraction of new businesses obtain money from someone who is not a founder of the business.  Therefore, unless your business has a lot of assets that can be used as collateral for a loan, or one of a handful of startups that has the super-high growth potential and exit plan to attract accredited angel investors and venture capitalists, seeking outside money is unlikely to be fruitful.  You are better off developing a less capital-intensive business model and financing the startup yourself than you are spending your time trying to raise money.
  2. Your personal credit and personal collateral are important when financing a startup. Only a minority of businesses borrow externally meaning that most of the capital that entrepreneurs borrow is personally borrowed or personally guaranteed.
  3. You are more likely to get a loan than an equity investment from an outsider, however, most of the companies that get outside financing obtain debt, not equity. Only a tiny percentage of startups are financed by selling equity to accredited angels or venture capitalists. History shows that around 1 percent of companies get their financing from angels or venture capitalists. Therefore, unless your business is the type that angels and venture capitalists look for, you shouldn’t waste your time seeking equity investors.
  4. Approaching trade creditors is where your odds of obtaining financing for the business itself are highest. Because trade credit is offered by suppliers to help you buy their products, even the newest businesses can obtain it.

In summary, unless you have a rare, super-high-growth business with plans to exit through an initial public offering or acquisition within five to seven years, your best bet is to minimize your capital needs and finance your start-up with your own money, money that you borrow personally, and trade credit.

Family Offices

If you would like to learn more about this topic you can find all of the information you need including comprehensive descriptions about every aspect of starting and building a company here.

Getting a loan to start a business 

Getting a loan to start a business

Getting a loan to start a business  

Starting a business can be a daunting and expensive task that uses up all of your disposable income, savings, credit card and then some. You initially start in a phase where you’re operating at a loss, any money coming in is going straight out to your liabilities and accounts payables. A business loan can help you make your next purchase, fund growth, or manage cash flow for your business, however, there are a number of things you should do before you apply:

1.     Understand your loan purpose

Being clear on why you want to borrow is the first step to choosing the right loan and it’s one of the first questions you’ll be asked by a lender.

2.     Work out the loan amount

Knowing the amount, you need will be reasonably straightforward. However, if you’re borrowing to cover a potential cash shortfall, working this out can be a little more involved.

3.     Calculate what you can afford to repay

The length of the loan will impact your repayment amounts. Your lender can outline the different loan term options in detail. Work out what you can afford to repay each month. You can do this by looking at your business’ past financials and completing cash flow forecasts.

4.     Decide between a secured or unsecured loan

You’ll usually be able to choose to have your loan secured or unsecured. Each has its benefits as well as considerations.


  • You offer an asset for the loan, such as property.
  • The interest rate will usually be lower than unsecured
  • The lender may sell your asset if you’re unable to repay the loan


  • No asset is offered
  • The interest rate is usually higher
  • It can sometimes be more difficult to be approved for an unsecured loan

5.     Choose a fixed or variable interest rate

As with other types of loans, you’ll often have the choice between a fixed or variable interest rate for your business loan. A variable rate may suit you best if you’re confident you can repay the loan even if rates increase. A fixed interest rate may be more appropriate and help manage your cash flow better by providing certainty with your repayments.

6.     Understand the fees and charges

Make sure you understand the true cost of any loan by comparing all the fees and charges. Some fees you may be charged include:

  • Establishment or application fees
  • Ongoing monthly fees
  • Early repayment fees
  • Exit fees
  • Valuation fees (if you choose to secure your loan)

7.     Get your paperwork ready

Preparing your business documents is an essential step that could help the lender decide sooner.

8.     Speak to an expert

Speaking to an expert, like your local business banker or accountant/book keeper is always an important step as they can check over your calculations and help you determine if you’re on the right track with your application.

What does it take to be eligible for a business loan?

What does it take to be eligible for a business loan?

When applying for business finance, you (and any directors, partners or guarantors) may be asked to provide:

1. Financial statements, preferably prepared by an accountant

Your financial statements will show your asset, liability and net worth positions, as well as your income and expenses that will be used to determine if you can meet your existing and proposed repayments.

Your financial statements will generally consist of a balance sheet and income statement. They may also include a statement of cash flow.

You may also be asked for your latest tax returns, business activity statements (BAS) or printouts of statements from your Australian Taxation Office (ATO) portal. If there are any trusts or self-managed super funds (SMSFs) related to your business, you may also need to provide additional documents.

2. Proof of individual income

Lenders will also want to know your personal income if you are a director and/or shareholder of a company. You’re likely to be asked for your two most recent individual tax returns and an ATO Notice of Assessment.

If you earn other income unrelated to your business, you may want to provide this information as well. For example, you could bring a rental statement if you own an investment property.

3. Bank Statements

So that the lender can obtain a complete picture of your financial position, they often ask that you provide details of your personal and business income, savings and liabilities such as loans and credit cards that you might have with other financial institutions.

You’ll also need to bring your latest bank statements – either paper or electronic copies are fine. If anyone is guaranteeing the loan, they will also need to provide this information.

4. Identification

If you are applying for a loan with a lender where you are an existing customer, you most likely won’t need to complete this step.

If you are a new customer, you’ll need to provide identification such as your driver’s licence or passport. The documents needed will vary depending on your business structure – you may also need to bring in your trust deed or partnership agreement or company registration, if applicable.

5. Extra things if you’re a start-up business

While longer-established businesses might be able to show years of documents to support their application, new businesses often don’t have this history. Here are three possible alternatives that might support your application:

  • other sources of income – income from a rental property or investments, or maintaining an income by working somewhere else until your business takes off
  • any relevant industry experience – this might be employment history in the same field as your new business, for example if you’ve worked elsewhere and decided to go into business for yourself
  • supporting documents – supporting documents can strengthen your application and give confidence in your business growth and outlook

6. Supporting documents

If you are yet to start your business or you have recently started trading and you don’t have 12 months of trading history, there are a few extra things you may need to provide, including:



    – showing your business strategy and goals for both the short and long term.

  • Cash flow projection – Showing your estimated income and expenses over a 12-month period. It will show whether your projected income will be enough to meet any finance requirements. If you submit a cash flow projection, it needs to be prepared by an accountant or business consultant.
  • Business Activity Statement (BAS) – This is a form you submit to the Australian Taxation Office (ATO) if your business is registered for Goods and Services Tax (GST). It helps you report and pay your GST and pay as you go (PAYG) instalments and withholding tax. Not all businesses will have this, but if you do, it can help show your cashflow and how you manage it.
  • Interim financial statements – These are documents that show your business activities, including your balance sheet, income, cash flow, changes in equity and notes of explanation. Your accountant can help you to establish these.
  • Contracts – If you have any current or future agreements from customers, these can help to show your business income.
  • Business ID check

Sources of finance for small business

This topic is explained in more depth in the Post titled, ‘Types of finance in business’ which covers sources including:

  • Self-funding
  • Debt Financing
  • Financial institutions
  • Finance companies
  • Supplier Finance
  • Factor companies
  • Trade Finance
  • Family or friends
  • Equity Financing
  • Family or friends
  • Private investors
  • Venture capitalists
  • Stock market
  • Crowdfunding
  • Grants and assistance programs
  • Lease Financing

Can I apply for a startup business loan from the Australian Government?

Below are listed some of the current grant programs that are available in Australia.

Australian Government Restart Incentive

A financial incentive for businesses from the Australian Government to encourage employment and retention of mature age employees.

Who can apply?

Australian businesses that hold a valid ABN that offer a job to a new employee over the age of 50 and have not previously received a wage subsidy for the same person before and the position is expected to be ongoing for an average of 20 hours per week.


Incentive payments totaling up to $10,000 paid to your business over six months.

Where to apply and find out more information

Your business must be registered with an employment services provider. Search for providers on jobsearch.gov.au or call 13 17 15.

R & D Tax Incentive

R & D Tax Incentive


A refundable tax offset of 43.5% for costs incurred on eligible research and development initiatives.

Who can apply?

You must be an incorporated company and have incurred eligible research and development costs or deductions of at least $20,000. Eligible core R&D activities are “experiments that are guided by hypotheses and conducted for the purpose of generating new knowledge”.

You can view more information on interpreting this definition here:


The annual turnover of your business must also be less than $20 million.


43.5% refundable tax offset against R&D expenditure that amounts to $100 million or less.

Where to apply and find out more information

You can apply online through this link:


Certain Inputs to Manufacture (CIM) programme

A concession allowing Australian manufacturers to import certain types of raw materials duty free.

Who can apply?

Australian manufacturers importing raw materials and intermediate goods to use in manufacturing a specific end product.

You must be able to demonstrate the imported goods will perform better than similar goods already produced domestically.

Two types of raw goods are eligible:

  • Chemical, plastics and paper goods
  • Metal materials and goods used in food packaging


A concession allowing you to import eligible goods and materials without paying import duties.

Where to apply and find out more information

You can print out a grant application from this link:


CSIRO Kick Start Grant

A matched funding grant up to $50,000 for Australian startups and SMEs to undertake research activities with the CSIRO to grow and develop their business.

Who can apply?

You must have an Australian Company Number (ACN), be registered for GST and have annual turnover under $1.5 million.

Eligible activities consist of undertaking research with the CSIRO such as:

  • Researching a new idea with commercial potential
  • Development of a new or improved product or process
  • Testing a new product or material that was developed by your company

The research project must be less than 12 months in duration.


The CSIRO will provide dollar-matched funding between $10,000 – $50,000 for your research investment.

Where to apply and find out more information

An expression of interest form can be downloaded using this link:


Australian Government Entrepreneurs Program

Australian Government Entrepreneurs Program

A Federal Government business scheme to encourage competitiveness, productivity and accelerate commercialisation of new ideas.

The program consists of four sub-program categories to help small to medium businesses grow and compete in new markets:

(i) Accelerating Commercialisation

Access to business advice and matched funding up to $1 million for eligible commercialisation costs to bring new products, processes and services to market.

Register with this online expression of interest form:


(ii) Business Management

Access to professional business advisers who will create a Business Evaluation Action Plan with recommendations for improvement and growth, as well as up to 12 months of mentoring to assist with implementing strategies.

Only businesses operating in specific growth sectors such as medical technology, food, agribusiness, advanced manufacturing and mining technology are eligible to apply. Annual turnover must be between $1.5 million to $100 million per year.

Register with this online expression of interest form:


(iii) Incubator Support

New and existing incubators can receive grants up to $500,000 to help Australian startups develop into international markets.

Regional startups can receive a higher grant where at least 80% of project activities are being undertaken in a regional area.

Register with this online expression of interest form:


(iv) Innovation Connections

Access to a professional facilitator to help Australian businesses connect with experts within the research sector to help define a project scope.

If the business chooses to fund the project, there is up to $50,000 in matched funding support available to the business to implement their ideas.

Register with this online expression of interest form:


State Government Grants – New South Wales

The NSW Small Business Grant provides a $2,000 grant to encourage businesses that currently do not pay payroll tax to hire new employees. The grant is paid for each new eligible employee hired.

See information about applying for the NSW Small Business Grant here:


State Government Grants – Victoria

Victorian state government Boost Your Business Vouchers provide a range of assistance programs for Victorian based businesses in eligible industries including:

  • Advanced manufacturing
  • Exporting to markets in Asia
  • Food innovation
  • Social enterprise capability
  • Defence and aerospace

Assistance comes in the form of vouchers which can be used for a range of services including market engagement, innovation and business capability.

Find out more here:


State Government Grants – Queensland

The Queensland government’s Business Growth Fund Program provides funding up to $50,000 for eligible businesses to purchase specialised equipment or services.

The program is designed to accelerate the growth of small to medium businesses with turnover that demonstrates high growth and employment aspirations.

Find out more here.


If you would like to learn more about this topic you can find all of the information you need including comprehensive descriptions about every aspect of starting and building a company here.

Where would be the best places to get a loan for my start up?

There are many financial organisations that advertise having a ‘loans for startups’, however, you need to be careful when selecting a lender and seek professional independent financial and legal advice before proceeding to apply.

Some links to try:


Loans for startups

Types of finance in business

Types of finance in business

Should I be looking at finance for a startup?

There are five types of business finance that startups could consider. It is advisable that you understand each of these before you decide the type of finance that suits your needs. The three main types are:

  • Self-funding – (Bootstrapping)
  • Debt finance– money provided by an external lender, such as a bank, building society or credit union
  • Equity finance – money sourced from within the business.
  • Grants – funding and support programs from across governments to help your business grow.
  • Lease Financing –

The first step is to work out how much you need, how the money will be used and how long it will last. The planning for this should be done by writing a Business Plan but remember, if your Business Plan shows that you cannot repay a loan then the probability is that you will not qualify for a loan in the first place.

If your idea is good then, even if you cannot quality for a loan, you may be able to attract Equity finance by offering shares in your company in return. This type of finance does not have to be repaid but you will give up some of your shares to attract investors.

When you have completed your Business Plan and know how much finance you need, it’s important to know your options. Knowing who to approach for finance can help you find the best finance option for your business.


Often called ‘bootstrapping’, self-funding is often the first step in seeking finance and involves funding purely through personal finances and revenue from the business. Investors and lenders will both expect some amount of self-funding before they agree to offer you finance.


What is Debt Financing?

Debt financing is borrowing money. There are many types of business loans including unofficial business scenarios where you take an equity loan on your home to finance the business or a relative gives you a loan to start it. There are also small-business loans and equipment or land loans for businesses. Most banks and credit unions offer some type of business financing, many with programs backed by the Small Business Administration standards and programs. There are also commercial lenders who specialize in business loans.

Most business loans are short-term loans, generally with terms from one to five years. Rates are high because of the risk of business failure and are often initiated by a business owner’s personal backing of the loan either with savings or property pledges. A property pledge might be a home or other large asset used in obtaining business loans.

The options for Debt finance are:

Financial institutions

Banks, building societies and credit unions offer a range of finance products with both short and long-term finance solutions including business loans, lines of credit, overdraft services, invoice financing, equipment leases and asset financing. The issue for borrowers is in meeting the criteria set by these institutions which will often require security in the form of collateral e.g. your house, the need to have been in business and held a savings/operating account for a minimum period of time, a Profit and Loss Statement, Taxation Return and a Business Plan.

Finance companies

Similar in ways to Financial Institutions you and your business will need to qualify for a loan. In today’s environment it is wise to check if the Finance companies you are considering are registered and have a good reputation. There is a wide range of Finance companies offering short and long-term loans and each will have their own Terms and Conditions (TOCs), the interest rates charged will be different as will penalties for late payment or default.

Supplier Finance

If your need for money is related to purchasing goods and supplies that will in turn be used to generate profits then suppliers may offer trade credit that allows businesses to delay payment for goods. Trade credit terms often vary and may only go to businesses that have a reputable connection with the supplier.

Factor companies

Factoring is a financial transaction and a type of debtor finance in which a business sells its accounts receivable (i.e., invoices) to a third party (called a factor) at a discount. A business will sometimes factor its receivable assets to meet its present and immediate cash needs. Forfaiting is a factoring arrangement used in international trade finance by exporters who wish to sell their receivables to a forfaiter. Factoring is commonly referred to as accounts receivable factoring, invoice factoring, and sometimes accounts receivable financing. Accounts receivable financing is a term more accurately used to describe a form of asset-based lending against accounts receivable.

In the United States, Factoring is not the same as invoice discounting (which is called an assignment of accounts receivable in American accounting – it is the sale of receivables, whereas invoice discounting (“assignment of accounts receivable” in American accounting) is a borrowing that involves the use of the accounts receivable assets as collateral for the loan. However, in some other markets, such as the UK, invoice discounting is considered to be a form of factoring, involving the “assignment of receivables”, that is included in official factoring statistics. It is therefore also not considered to be borrowing in the UK. In the UK the arrangement is usually confidential in that the debtor is not notified of the assignment of the receivable and the seller of the receivable collects the debt on behalf of the factor. In the UK, the main difference between factoring and invoice discounting is confidentiality. Scottish law differs from that of the rest of the UK, in that notification to the account debtor is required for the assignment to take place. The Scottish Law Commission is[ reviewing this position and seeks to propose reform by the end of 2017.

While factoring is a way to get quick access to cash, it can be quite expensive compared to traditional financing options.

Trade Finance

Trade finance is an important external source of working capital finance. It is a form of short-term credit typically used by companies that export or import goods. It is relatively easy to secure short term finance, if you have a string trading record, secured against good or backed by an insurance policy.

Family or friends

If a friend or relative offers you a loan, it’s called a debt finance arrangement. If you decide on this option, carefully consider how this arrangement could affect your relationship.

What is Equity Financing?

Business owners may opt to sell corporate stock through private or public offerings. Depending on the amount of money being raised by selling shares of stock, regulatory entities may require public disclosures and filings. A public offering makes the company a traded entity on one of the stock exchanges.

Family or friends

Offering a partnership or share in your business to family or friends in return for equity is often an easy way of obtaining finance. However, consider this option carefully to ensure your relationship is not adversely affected.

Private investors

Investors can contribute funds to your business in return for a share in your profits and equity. Investors such as business angels can also work in the business providing expertise or advice as well as funds.

Private investors

Venture capitalists

Venture capitalists are usually large corporations that invest large sums in start-up businesses with the potential for high growth and large profits. They typically require a large controlling share of the business and often provide management or industry expertise.

Stock market

Also known as an Initial Public Offering (IPO), floating on the stock market involves publicly offering shares to raise capital. This can be a more expensive and complex option and carries the risk of not raising the funds needed due to poor market conditions.


Some social media websites offer entrepreneurs a crowdfunding platform for their product prototypes or innovative projects. It involves setting a funding goal, providing project and budget details and inviting people to contribute to a startup capital pool.

Grants and assistance programs

Grants and assistance programs

In general, the governments do not provide finance for starting up or buying a business. However, you may be eligible for a grant, such as business expansion, research and development, innovation or exporting. Most countries, States and Regions have grants and assistance for startups.

Find grants, funding and support programs from across government to help your business grow and succeed! When searching for funding, keep in mind that you’ll generally need to meet certain criteria to be eligible, and that aside from funding assistance, many programs can help your business by building your skills and knowledge.

Businesses often fail because of a lack of funding for growth in areas of business equipment, operations and marketing. Financing a business is often overwhelming for business owners because there are many options to fund a company, each with different rules. Breaking business finance into three basic categories simplifies the process and organizes the financial needs of the business.

What is Lease Financing?

Lease options are popular for equipment, commercial automobiles and land. Leasing allows the business to keep autos and equipment up to date and new while lowering monthly payments compared to buying. A lease isn’t debt or equity financing. It is an agreement of use for a specified period. An example is leasing a box truck for three years, so the company has a delivery vehicle. After the three-year term, the company has the option to buy the truck or to return it and lease a newer model.

If you would like to learn more about this topic you can find all of the information you need including comprehensive descriptions about every aspect of starting and building a company here.



How to come up with a business idea


Ways of finding business ideas

www.seed-db.com/accelerators research claims that there are 472 million individuals worldwide who can be classed as Entrepreneurs’ and 100 million new startups were created last year and every one of these startups has a business idea. Today’s economy is forcing many people into creating their own income and for many of these it means starting a new business, but where are they getting their ideas from?

I have seen questions posted on the forum www.Quora.com such as “What is a good idea for a new business?” and “How do I start a business that will become a Unicorn?” It is unlikely that anyone will tell you their secrets, it is more likely they will do it themselves, so where do you go from here?

Generally, there are two options, firstly, if you have the money, buy an existing business that gives you an income, and secondly, start a new business competing in an existing marketplace or developing something that is new and disruptive. Either way the business/idea will not generate revenue unless there is a market need.

Where do ideas come from?

Entrepreneurs have inquisitive minds and are continually thinking about how to turn them in to a business. Few entrepreneurs are geniuses, however, there are techniques you can use in the process.

  1. Start with the areas you understand and see if there are any problems that you can solve – For example I co-founded a company with an idea to simplify administration and eliminate paperwork for companies that provided benefits for their employees. As you would imagine the field was full of medium and large competitors, but they all had the same processes. What we designed and implemented was a Credit Card that complied with taxation requirements and eliminated all paperwork. No one had thought of it before and the company was a great success. The important thing was that we solved an existing problem and the market needed a solution.
  2. Look around and listen – you will often hear people complaining about products and services and making statements like “if only the product/service could do this” or “I hate the way this is done”. Statements like these are opportunities.
  3. Sometimes you have a lightbulb moment – Years ago I was managing a large multinational company (Dulmison Ltd) and was on a trip throughout the USA to buy land on which to build a factory. I met with hundreds of people who each gave me their business cards. Later, sitting in the office with two fellow executives we lightheartedly pondered how to record all of the details on the cards and came up with the concept of a magnetic strip on the back of a business card. We thought we were onto something so we spoke with Hewlett Packard and Texas Instruments to see if they would partner us in a venture where they would use one of their calculators as a storage device for the information. To our utter disappointment both refused and dismissed the idea. So, what next???

PIVOT – this is something that happens often when developing a new idea. You need to review where you are at and change direction if there is another way. In the business card case, we decided to build the calculator in-house as the multinational company had significant facilities. During the course of the build we PIVOTED again, and the calculator became the world’s first laptop computer, the Dulmont Magnum (aka Kookaburra). The first time a flip top screen had been created the unit weighed just 4kg and became a worldwide success.

  1. Don’t be too quick to dismiss an idea – To confess there have been occasions where I have not got it right my first mentor asked me for my views on a product he was interested in. I took one look at it and replied, “who would buy a surfboard with a sail on it?” Terrible judgement on my part as he proceeded with the product, purchased the national rights and made a fortune manufacturing and selling sailboards.

There are many other ways in which new ideas, products and services arise and you can find these in “Idea to IPO”.

I have an idea for business, what’s the next step?

One of the first things you need to consider after making the decision to turn your idea into a business is the legal structure that you will use to develop it under. There are a number of choices, each has different responsibilities, taxes, advantages and disadvantages so some thought at this stage is important.

The most common forms of legal structures are:

  • Sole proprietorship
  • Partnership
  • Corporation
  • Limited liability company
  • limited liability partnership
  • Public company

It is not uncommon to start out with the simplest structure and, at a later date, change to another legal structure. As your business grows you may want to raise funds by listing your company on a stock exchange and offering shares to the public by changing your legal structure to a Public Company.

Other considerations include how you protect your Intellectual property (IP) and whether a Holding Company is appropriate. Holding Companies and IP are discussed in “Idea to IPO”.

Irrespective of the method you think may be appropriate it is strongly recommended that you seek professional legal advice when establishing a legal entity that will be your company.

How do I know if my idea for business will work?

Every idea requires market acceptance to make it successful. This process is called Validation. To validate that the market wants your product or service you need to consider the following points:

  • What is your value proposition?
  • How are you going to create and grow customer relationships?
  • How will the customers be able to access your start-up?
  • What are the customer pain points are and how your solution is actually going to solve them?
  • How will your start-up create value?
  • Does your start-up need to work with other people or companies to create the value? g. distribution channels
  • How will your start-up capture value?
  • What does the cost structure of your start-up look like?
  • What are the different ways you can generate revenue?

Define, test and correct

Validations cannot just be assumptions, but they must be based on evidence and data you’ve gathered. The critical thing to realise about a business model is that it cannot be set in stone so be prepared to refine and retest if necessary.

I need help to get my idea off the ground

There are many aspects involved in taking an idea and transforming it into a successful business. Unfortunately for a lot of Founders it means that they spend less time on their creation and more on the mechanics of their business. Sole Founders are often considered a risk by investors who prefer that there is a mix of skills in the business that complement each other. The problem for most startups is that cannot afford to employ an A level team and cannot afford a suite of consultants.

The question that arises is how do I get the skills and commitment needed when I don’t have the money? This is the moment when you need to consider whether you give up some of your equity to attract the right people. The uncertainty of not knowing how the new people will perform and whether they will add value is a real one. Some of the ways this may be addressed include:

  • ‘Sweat Equity’ where you hire a key person on the basis of a formal promise of equity subject to performance milestones.
  • Employee Share Option Plans (ESOPs) where key employees often received a less than market salary, that is topped-up by share options, subject to meeting preset performance criteria.
  • Appointing an ‘Advisory Board’ where you gain the skills and experience of people who have ‘done it before’. Generally, a day or two a month for a nominal payment is applicable.
  • Offering incentives to employees based on company objectives.

In conclusion

Transforming an idea into a successful business requires effort, research and commitment. There will be many times when it seems all too hard, however, every successful entrepreneur has experience exactly what you are going through. You might fail at certain points along the way, but you will be interested to know that investors value entrepreneurs who have failed because the chance of failing for the same reasons are greatly reduced.

If you would like to learn more about this topic you can find all of the information you need including comprehensive descriptions about every aspect of starting and building a company here.

Do I need a Business Plan? 

What is a business plan? 

Wikipedia defines a Business Plan as 

a formal written document containing business goals, the methods on how these goals can be attained, and the time frame within which these goals need to be achieved. It also describes the nature of the business, background information on the organization, the organization’s financial projections, and the strategies it intends to implement to achieve the stated targets. In its entirety, this document serves as a road map that provides direction to the business. Written business plans are often required to obtain a bank loan or other kind of financing.  

(Source: https://en.wikipedia.org/wiki/Business_plan) 

Is it hard to create a business plan? 

The creation of a Business Plan is the second most important thing that you will do behind the idea itself. It will require you to understand every aspect of your business and is a great learning curve in your path to success. 

As you work through each part of the Business Plan you will find that there are things you do not know and each of these will require additional research.  

While doing this, you will most likely have moments where the experience is overwhelming. When this happens take a break and come back to what you are doing because it is extremely important that you take control of your business plan. 

It is a fallacy to think that you can go online and have someone write your Business Plan for a few hundred dollars. They don’t know you, probably have little experience in business themselves and, for that amount of money, will deliver a pre-formatted stereotypical set of answers.

Business Mentors can assist but they generally rely on their personal experience to ask you questions that help them understand what you need and will suggest a set of tasks for you to complete.

On the other hand, hiring a consultant who has real experience in your field and who will assist in working with you to understand your business and deliver a comprehensive Business Plan tailored to your needs can take at least a month’s work and cost up to $20,000.  

If you choose to go it alone and search articles online it is a good thing to check that they come complete with explanatory text covering all aspects of: 

  • the business 
  • templates 
  • spreadsheets 
  • guidelines for completing documentation  
  • plus, any other relevant information. 

The most cost and time effective solution for most business owners is to learn from those that have succeeded and have been prepared to make the knowledge and tools available at a nominal cost. 

It is not uncommon to be led into a set of information that is there solely as a front to sell consulting services.

What are the components of a business plan?

 components of a business plan

A typical Business Plan includes: 

  • Executive Summary* 
  • Business details 
  • Registration details 
  • Vision statement 
  • Mission statement 
  • Goals/objectives 
  • Action plan 
  • Business premises 
  • Organisation chart 
  • Management & ownership 
  • Key personnel 
  • Products/services 
  • Market position 
  • Your competitors  
  • Your customers 
  • Unique selling position  
  • Anticipated demand 
  • Pricing strategy 
  • Value to customer 
  • Road to Market  
  • Growth potential 
  • Innovation 
  • Risk management 
  • Legal considerations  
  • Communication channels 
  • Environmental/industry analysis 
  • S.W.O.T. analysis 
  • Advertising & sales 
  • The Future 
  • Cashflow forecasts 

 Additional sections will be needed if the intent of the Business Plan is also to raise funds from an investor or financial institution. 

*Just a quick note… 

If you intend the Business Plan to be read by others outside your company e.g. by investors or financial institutions the Executive Summary is the most critical part of your Business Plan.

In today’s venture capital and investor space it is not uncommon for them to receive as many as 200 proposals every month. The time they spend on each is rarely more than 90 seconds, not enough to read what you are telling them in the full Business Plan.

The Executive Summary MUST contain ALL of the important points condensed into a maximum of 2 pages. Knowing how to do this is vital to your business’ survival

A handy tip for this is to write the rest of your plan first and then your Executive summary last. It may go at the beginning, but you can’t really write about what you don’t know about.  

Building a business plan framework 

Building a business plan framework 

There are several steps in creating a Business Plan and the time you spend on this is invaluable. It will provide you with insights into your company that can surprise you, it can also reveal opportunities and revenue streams that you have not even considered.

Collaboration with your co-founder – if you have one, your key employees and/or executive team will deliver insights that can be keys to important parts of information that are put into the Business Plan. 

Every element is important and the more you know and understand about each, the better the business is prepared for future events. In the book From Idea to IPO” you will find more than 100 questions that you could and will most likely be asked about your company.

Each of the questions has its origin in your Business Plan and the more prepared you are to answer these questions, the more it will pay off when you are talking with financial institutions or investors.

Expect them to be ruthless in the questions they ask as they want to know that you understand your business and have the vision and capabilities to lead it to greater things. 

The Competition 

A common mistake when preparing a Business Plan for a new product or service is to underestimate your competition.

I have been in a room full of investors looking for the next Unicorn where the Founder of a company has stated that they “do not have any competitors.

For investors this is a RED FLAG as they assume that the Founder has not done their homework and most serious investors will walk away. A

ll the work the Founder has done in creating a Business Plan has been in vain as it is unlikely he or she will get a second chance to present to the same group. 

In the past it could be argued that the hurdles in setting up a new venture (also known as “Barriers to Entry”) were high as it would take significant capital and resources to enter or compete in a new field.

Today those barriers in most sectors have disappeared and technology has enabled companies operating in one sector to suddenly start operations in a new sector. 

For anyone that doubts that competitors can arise at any moment in a traditional industry, they should search for 3D printed houses. S-Squared 3D Printers (SQ3D), 3D-printed a basic prototype home in an estimated 12 hours. (Source: https://newatlas.com/sq3d-sq4d-3d-printed-house-prototype/61123/) 

The message here is that you might think that there are no competitors, however, you probably do have competitors or someone that can jump into your field at a moment’s notice.

Some businesses have Intellectual Property (IP) that can be protected by Patents and these can afford a measure of protection, but also take years to obtain.

One point to bear in mind is that having a Patent does not guarantee that there is a need in the marketplace for the product, it is just part of the Business Plan that can be attractive to investors. 

Life of a Business Plan 

Business Plans are important at the start of a business; however, they need to be updated on a regular basis.

Most Business Plans include a 3-year cash flow and sales forecast based on circumstances current and predicted at the time of writing.

Your Business Plan should be revised and updated when there is a significant change in sales landscape including: 

  • Predicted volumes 
  • New opportunities 
  • Legislation changes that affect your product or service 
  • Significant changes in competition 
  • Changes in company structure and ownership 
  • Or any other event that will have an impact on the business 

When a Business Becomes a Unicorn

When a Business Becomes a Unicorn

The goal for many founders, companies and investors is to reach Unicorn status with their company. That is, a company whose capital worth on the stock market exceeds $1 billion.

Having personally founded one Unicorn and been associated with a second company that achieved this status; the process from the Idea to the Unicorn took about 10 years to complete, requiring numerous revisions of the Business Plan and eventually an Initial Public Offer ( IPO) on a stock market.

The IPO process is a Business Plan in itself that requires immense effort by many parties within and outside of the company.

The planning phase is intense, and the required public documentation and verification is substantial, however the lessons learned in your first Business Plan will form a great basis to assist in this process.

Unicorn Insights – From Idea to IPO” covers the path to an IPO in detail and provides insights to what’s in store. 


Always bear in mind the message from others that have gone before you: 

“If you fail to plan; you are planning to fail” 

You have a great idea – make sure you do everything to make it succeed. 

If you would like to learn more about this topic you can find all of the information you need including comprehensive descriptions about every aspect of starting and building a company here.

How does a company reach Unicorn status? 

In 2013 in the world of finance, venture capitalist, Aileen Lee called new companies valued at over one billion dollars unicorns. To build a billion-dollar company from scratch is an incredibly difficult feat.  

Only 0.05% of startups succeed in raising venture capital. In 2018 year, CB Insights reported that the odds of becoming a unicorn was less than 1 percent for companies that had raised venture capital. 

For every 200,000 startups only 1 unicorn appears. 

Rarely does an individual have the opportunity to be involved with 2 unicorns. 

In 2000 the author of this publication “Idea to IPO”, Alex Paine, founded Smartsalary now known as Smartgroup Ltd which today has a capital value of $1.6 billion. 

In 1998 Alex was a Director of RPC  and associated with the founding of RPC Plan Managers which later merged with Computershare. Today, it has a capital value of $8.5 billion. 

In other ventures, Alex was the co-creator of the idea that became the world’s first laptop computer, the Dulmont Magnum, the Founder of PBI Benefit Solution Pty Ltd, a fintech company that formed a joint venture with one of Australia’s largest banks and the author of numerous business publications.  

The experiences gained in this journey has led to the creation of Idea to IPO and its associated templates and tools for the benefit of everyone that wants to build a successful business. 

Few companies reach Unicorn status without going through an Initial Public Offering (IPO) where the business is listed on a public stock exchange and the incoming investors effectively establish the value of the company by purchasing shares. 

How does a company reach Unicorn status 

 (Initial Public Offering) 

When a company reaches a certain size, continued growth requires a serious injection of capital: too much even for Venture Capitalists (VCs) to contribute. It’s here that some companies will consider an Initial Public Offering, and transform into an organisation that anyone can invest in. 

Often called a stock market launch in practical terms, this means transforming from a privately held company into a public one, selling a portion of shares to institutional investors (like banks, insurers and hedge funds) who then make the shares available for purchase on the public stock exchange. 

Pros and Cons of an Initial Public Offering 

Massive funding potential. Big angel and VC investments can net a growing start-up millions of dollars in investment – but an IPO can raise billions.  It’s expensive. The average cost of an IPO is 

$3.7 million, and with a whole plethora of regulatory commitments to adhere to. 

Liquidity. IPOs often make it possible for founders and other investors to sell their shares. As well as rewarding the start-up’s long-standing investors, this helps free up liquid capital for the company to spend in other areas of growth.  Loss of control. Public companies often have thousands of shareholders, each with voting rights. Performance needs to be reported, each and every quarter, and poor performance will need to be answered for. 
Attract talent. Raising an IPO also makes it possible to offer stock options as incentive for top talent.  It’s a different job. Running a public company is a very different job to the one most start-up founders sign-on for. 

 What is an IPO

If you would like to learn more about this topic you can find all of the information you need including comprehensive descriptions about every aspect of starting and building a company here.

How to grow a small business into a large business 

How to grow a small business into a large business

What does it take to expand my business? 

Many businesses that fail aren’t insolvent or even unprofitable, they just run out of cash as a result of timing. A business that sells products may need to fund the stock well ahead of receiving sales revenue, but in the interim, it still has to pay staff and all of the other expenses.

Managing cash flow is the single most important thing you can do. It doesn’t matter how much cash you raise; without revenue generation you will eventually run dry.  

The biggest mistake to be made is spending money on features that are not needed or spending your marketing budget with no control on measuring what you are getting back. Do not spend on things that aren’t essential to expansion. 

Business expansion strategies 

Business expansion strategies 

There are two things that every entrepreneur wishes for: more time and more money. 

We desire more money so that we can run ads; pay for employees or expand our operations, and everything else in between. Having more money would be great but it’s wasted if you don’t know how to spend or properly invest that money on marketing or growing your business. 

It’s often hard to find time to do anything when you’re enthralled in building or scaling a business to any degree.

Not only do you need to effectively bootstrap your growth by wearing many hats, you also need to constantly work to increase your skill set while struggling to wrangle sales, dealing with customer service and tending to other tedious issues that tend to take up a large chunk of time. 

There never seems to be enough hours in your day. If you’re not properly managing your time with an effective time management system, or you’re immersed in one bad habit after another that seems to be eating away at all the precious moments you do have, then the problems compound on themselves. 

Setting proper goals is necessary for anyone who’s serious about scaling their business, making more money, producing more product or achieving any other dream. They need to be smarter goals and there needs to be powerful reasons behind why those goals absolutely must be achieved. 

By creating a plan, taking action and staying persistent no matter what, you can leverage the following strategies and methods to scale your business. 

Take a scientific approach to growth 

It’s tempting to always be chasing a “silver bullet” for growth. The viral video, press coverage, star sales rep, or guerrilla marketing campaign which will propel you to success. While these big wins will often happen at points throughout your journey, they’re usually impossible to predict. .

data-contrast=”none”>Top performing companies take a scientific approach to growth, rather than relying on chance 

This is usually done by: 

  • Brainstorming new growth strategy ideas regularly, and save in a backlog 
  • Prioritising your ideas quickly, and effectively 
  • Develop hypotheses to test new ideas with minimal time and resource 
  • Scale- up investments into tests which perform, and 
  • Incorporate learning from failures into the development of future growth strategies 

Align key growth functions 

It’s not breaking news that Sales, Marketing and Customer Success often don’t see eye-to-eye. It’s not uncommon to witness: 

  • Sales teams blaming marketing for low quality leads 
  • Marketing teams blaming sales for poor follow-up 
  • Customer Success blaming both Sales & Marketing for generating poor-fit customers 
  • Sales & Marketing blaming Customer Success for not retaining or up selling the customers they generate 

Alignment across all growth functions is essential for success. 

Sales, Marketing & Customer Success each need to agree on common terminology, use consistent messaging, promote the same content, work towards the same goals, and share information and insight in a friction-less way.

Most important of all, they need to share a common understanding of your company’s Growth Metrics, Ideal Customer Profile & Buyer Personas. 

Marketing techniques for expanding your business 

Marketing techniques for expanding your business 

Leverage legitimate SEO techniques 

SEO seems complex and confusing, but it really boils down to a few fundamental principles. Learn SEO the right way, leveraging the proper techniques, while adhering to Google’s many rules, and you’ll succeed. 

Your visibility will eventually grow, resulting in a natural increase in leads and sales. 

Create and share content on a Blog 

Starting a blog is simple and straightforward.

What isn’t simple and straightforward is actually posting useful and unique content that adds a tremendous amount of value and doing that consistently.

However, blogging is one of the best ways that you can build authority and create an organic audience over time. By becoming an authority, you’ll end up attracting customers rather than chasing after them. 

Advertise with AdWords or Facebook 

Conversion-pixel tracking is a great way to grow your business online by targeting the right audience.

You can do this with a Facebook conversion pixel, while also tracking any event such as shopping cart abandonments or products that were added to a wish list but not purchased and so on. You can then directly target these individuals with ads, enticing them to come back.

Similarly, on Google’s AdWords platform, you can use re-targeting through contextual or search-related ads as well. 

Answer questions on Quora 

Quora offers up a great opportunity for online marketers to connect with a massive audience by answering questions and engaging with like-minded individuals from around the world.

Use Quora to spread value and further establish yourself as an authority, effectively helping you to scale your business by boosting your visibility through the Platform’s Massive Footprint. 

Run a contest or giveaway 

Contests and giveaways offer another quick way to market.

The word “free” is very enticing, and people will naturally want to sign up for anything that involves a potential windfall prize. Your giveaway needs to be worth it, if you’re going to collect that all-important contact information.

However, be sure to pay homage to local laws and regulations when running any kind of contest. 

Setup a social media content channel 

Social media offers one of the most abundant opportunities for scaling any business, no matter what type of business you’ve started. It also offers an avenue to tap into the world’s connected population, quickly and effectively.

Clearly, achieving a massive following is no simple feat, but that shouldn’t deter you from establishing a content channel where you can spread value throughout social media to raise the awareness and visibility of your offers. 

Build in-depth YouTube tutorials. 

Deep dive into the world of video with YouTube tutorials. Creating a popular YouTube channel isn’t easy, but it is well worth it. To do it, you have to provide in-depth tutorials, helping people to really understand a niche or solve a problem.

Whatever it is that you do, help to educate the world on how best to do it. In turn, you’ll become an authority and an industry leader, ultimately leading to greater exposure and eventually, more sales. 

Create a lead magnet and sales funnel 

Ask any smart online marketer about how they scale out a business and they’ll tell you the same thing: build an effective sales funnel. Draw them in with a value-laced lead magnet and drop them into a funnel where you can sell them on autopilot.

The right sales funnel, split-tested to oblivion, with a clear understanding of your cost-per acquisition, can be scaled infinitely.

Not only will you grow your business by leaps and bounds, but you’ll make tremendous amounts of money no matter what business you’re in. 

Deliver real value through email marketing 

Email marketing is the most powerful driver of sales for leading online marketers and businesses the world over. This isn’t just about your email drip-campaigns that go out automatically; this is about truly reaching out and connecting with your subscribers.

It’s that connection to you that will help sell whatever it is that you’re selling on autopilot. However, it has to be done the right way. Not by spamming but by genuinely sharing and trying to help others. 

Hire commission-based sales reps

Hire commission-based sales reps

Most businesses can’t afford to keep a large staff of salespeople on board. Instead, they turn to commission-based sales reps to help provide a steppingstone to the next level in their business. However, those sales reps need to be effectively trained; they can’t simply be hired and forgotten about.

Take the time to create training videos and helpful guides to walk them through your entire system and business and use it to quickly scale things out when you need to bring on more members of the team. 

Setup an affiliate program 

Affiliate programs can drive a significant amount of traffic. In fact, some of the biggest online marketers rely heavily on affiliate income generated through email marketing or preexisting website or blog traffic. However, setting up an affiliate program isn’t always simple, since there are so many facets involved.

If you’re an absolute novice, turn to some of the leading affiliate sites such as Link Share, Impact Radius and Commission Junction to quickly build an affiliate program. 

WebsitesLanding PagesFunnels & Squeeze Pages 

Websites, Landing Pages, Funnels & Squeeze Pages 

Did you know that many out-of-the box websites do not automatically rank on Google?3

Social media marketing and website optimisation have become specialist fields that you can no longer ignore.  You might think a basic website is boring, but when done correctly and with the user in mind, Google is friendlier to your website. 

By making sure that your website or online presence is cohesive and done correctly, it’s essential that you understand how they all work and can work together

Going online 

Digital marketing took hold in the 1990’s with companies creating their first website to grow their brand and sell their services and products. Success relied on search engines finding your site and ranking it above others in the search result display.

The pace of technological change has seen the look of websites change as has the way in which social media is used in conjunction with a website. 


A website is a set of interconnected pages with details about your business. 

Business websites explain what the business is and does as well as products and services available. 

Websites are useful for the following reasons: 

  • Tell Your Story 
  • Promote your brand 
  • Explain Your Products/Services 
  • E-commerce 
  • Provide a Forum or Blog 
  • Relate to Customers 
  • Showcase your company culture, mission, values, and style 

Landing Pages 

If you’re wondering about a landing page vs a website, consider using them both together. Each should be used for different things, and neither should be replaced by the other. 

A landing page is a standalone, single web page that marketers send traffic to, from online advertising campaigns, social media, or email marketing initiatives. A landing page can serve one of two purposes: 

Landing Pages are effective for a variety of tasks: 

Google judges pay-per-click (PPC) ads’ quality partly by their relevance to the linked page, and a specific landing page built around the ad will be more relevant than a general Products or Services page. This means it appears higher in search results and gives visitors what they’re looking for. 


A funnel is a series of pages that direct the user to the page that serves as the end goal.

These funnels guide users through a journey of pages that aim to sell your products and services; In doing so also adding options to upsell your sales process. 

First, the user would click on the initial URL from an online advertisement, social post, or email. This first click would bring them to a page that gives us the opportunity to upsell a product. In short, you want to introduce and encourage the purchase of those additional products.

To entice the user to buy, we would include a Call to Action (CTA) to “Buy Now.” The hope is that they click that CTA and continue on to the next page that introduces another product.

If they decide they only want that first product and choose “no” for the second one, they would continue to the page where they enter their information to sign up for a consultation. 

Funnels essentially continue until a user simply wants to reach their end destination and is no longer interested in additional products or services. A key benefit of this type of marketing and sales funnel is that they can be as complex or simple as you want.

Of course, the more pages with offers you include the more opportunities you’ll have to collect information, upsell, and complete your sales funnel. 

Squeeze Pages 

A squeeze page is designed to squeeze a visitor’s email address from them by offering something valuable in return. You encourage visitors to opt-in to an email or subscriber list to collect more information about the product or service featured on the main squeeze page. 

A successful squeeze page doesn’t just ask for your visitor’s email address. Squeeze pages also provide a good reason visitors should provide their personal information in exchange for whatever valuable offer you have available. The offer should be irresistible to justify the need to ask for your visitor’s email address. 

Squeeze pages are important because they allow you to capture your visitor’s email address, so you can eventually sell them on something later. When you’re able to capture their email address, you have the opportunity to push them further down your sales funnel and build a lasting relationship with them. 

What can you offer on your squeeze page? Some digital assets you can feature: 

  • eBook 
  • Whitepaper 
  • Newsletter 
  • Video or webinar
  • Free report
  • Podcast 
  • Slide deck 

There are multiple techniques available to expand your business and increase revenue and you can use as many of them as you feel is appropriate, however you must be prepared to keep up to date with how each of these work.

Google, Facebook and others change algorithms, pricing policy and strategy continually. What is effective today may not be tomorrow and often you don’t know why. 

If you would like to learn more about this topic you can find all of the information you need including comprehensive descriptions about every aspect of starting and building a company here.


Product Life Cycle

Product Lifecycle

Product life cycle stages 

When developing a new product, there are four phases related to a product’s life cycle, namely; 

  1. Introduction 
  2. Growth 
  3. Maturity 
  4. Decline 

This is certainly the case for established businesses, however, for startups there are a few more; 

  1. The Idea 
  2. Market Validation 
  3. Creating a Minimum Viable Product (MVP) 
  4. Gaining market feedback 
  5. Modification of the product or service 
  6. Introduction 
  7. Growth 
  8. Maturity 
  9. Decline 

In other words, there is a lot to do before ‘Introducing’ your product or service to the broader market. Let’s have a look at each Phase and see what it means for your business. 

The Idea 

data-contrast=”auto”>Where ideas originate from and how to find them has been described in the article ‘How to come up with a business idea’ and is obviously the first step for a startup’s new product or service. 

Market Validation 

The entry of your product/service into the market needs to be validated by completing industry trials. You also need to finalise your target market, pricing model and market entry strategy. 

  • Have you completed trials to confirm the strength of both the product and the market? 
  • Have you identified your target market and worked out your market entry strategy? 
  • Do you have a well-developed pricing strategy/model that is ready to go? 
  • Do you understand the distribution channels needed to achieve market entry? 
  • Can you recognise the ‘influencers’ in the market that will assist your market entry? 

Creating a Minimum Viable Product (MVP) 

A Minimum Viable Product or MVP is a development technique in which a new product is introduced to a limited market with basic features, but enough to get the attention of the consumers.  

Your MVP is the most basic version of the product which the company wants to launch in the market to gauge the response from prospective consumers or buyers.

The MVP concept allows you to understand where the product is lacking and/or what are its’ strengths and weaknesses.

Gaining market feedback 

Talking with customers, and users of your MVP is critical because you will gain important insights into what needs to be modified in order to have a successful full featured product launch.. 

Modification of the product or service 

The MVP process may need to be repeated before the final design meets everyone’s’ needs and expectations 

Introduction stage of the product life cycle 

The Introduction stage of the product life cycle can be expensive when launching a new product as the size of the market for the product may be small, and sales low. 

The cost of research and development, consumer testing, marketing and advertising needed to launch the product can be high, with low initial revenue to cover costs. 


The growth stage is characterised by a strong growth in sales and profits, and because the company can start to benefit from economies of scale in production, the profit margins, as well as the overall amount of profit, will increase. 

Increased revenue and higher profits make it easier for companies to launch the product into other regions and countries; making it possible to invest more money in promotional activity and maximissales potential. 


The product is established and the aim for the manufacturer is now to maintain the market share. If the product was the first of its kind or has unique features you may find that competitors are catching up and introducing alternatives.

You may consider modifying the product and adding new features to maintain a market edge. At this stage price competition becomes an issue as competitors introduce lower cost options. 


All things that go up, must come down. When the Product life cycle declines, what should you  do at this point? 

For many products, but not necessarily all, the market may shrink, and demand diminish, and this is what’s known as the decline stage.

This shrinkage could be due to the market becoming saturated (i.e. all the customers who will buy the product have already purchased it), or because the consumers are switching to a newer or different type of product. 

At this point, preferably earlier, serious thought should go into cost reductions in the manufacturing or delivery process.

To achieve this, it is wise to implement what is known as a LEAN (please expand on the acronym.) approach where every step in the process is continually reexamined to look for potential improvements.

LEAN has an important message ‘If part of the process does not benefit the product or service and it does not benefit the user (customer) it should be discarded’. 


If you would like to learn more about this topic you can find all of the information you need including comprehensive descriptions about every aspect of starting and building a company here.