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Written by John Elsdon Chairman of Allied Powers Limited
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 When I was asked to do this article the second thought that crossed my mind was how to make it interesting enough for people to want to read it. Needless to say, the first thought was, is this something I can do at all?
So having given it some thought here goes I am going to liken a business to a car for the purposes of illustration and for that matter something that we all have at least a passing knowledge of.
If we consider the business to be a car which is made up of all sorts of components, many of which we dont understand or more to the point dont want to understand, then we are the driver, who is responsible not just for driving it forward need to give it direction and. of course, ensure all the components work together to provide the propulsion to move us along towards our goal.
The engine in the car is full of very important parts that all have to work together to deliver that power so that when we put our foot down - something happens.
Money which is what this article is primarily intended to help you get a handle on is in this example the oil in the engine you may have even heard of it in banking terms as liquidity!
So we all know that we need to put oil in the engine to make it function as it should. It may not be so obvious that there are many types of oil for all types of engines and a one for all approach may work but will not bring the best performance out.
So it is with your business. There is, believe it or not, both the right type and more importantly the wrong type of money for a business, and again it is not a one size fits all approach. The type of money you need is different depending on the type of business you have, your realistic goals and how fast you want to grow it etc.
Money like oil is just another commodity and you will find many people are prepared to sell this to you, and despite all the financial protection etc the lenders will sell it to you as long as they believe you are a good risk something which during the current economic situation is a constantly changing factor.
The reality of the situation is that you may get the wrong product, or not enough of the right one - and we all know what happens if there is not enough oil in the engine it just grinds to a halt and you may have to throw away the whole car as the cost of replacing the engine is too great!
So what is the right money and more importantly, not like a garage forecourt it is not as obvious a place to get it.
Trying to keep this as straightforward as I can there are only two types of money, Savings or Borrowings.
If you have run a successful business before you may well have savings you want to put into your business - well done - but you will also know that in order to grow a business you will at some point need to take on borrowings to give your business that liquid engineering that will help you get to your desired goals.
So the types of borrowings are too numerous to cover in this article but some of the more common ones are:-
The Bank
The Government
Grants
Development Assistance
Friends and Family
Angel Investors
Asset or Debt Finance
Venture Capital Trusts
Venture Capital
Sorry to those I have left out I am sure I will get lots of others pointing this out we can include them in the reprints!
Some of this you may have in place already usually you will have a relationship with your bank who should be a trusted partner who will help you through this I know many of you will not be thinking that at this moment in time but this is really the type of relationship you need with your bank and if not consider asking for their help this is always a good start.
Much of the work we do is getting involved with business growth and helping businesses expand and exit where appropriate and you would be surprised as to how helpful most of the above sources of capital can be.
With borrowing money comes responsibility for making sure you use it appropriately and when I have referred to the wrong type of money this is where the strings attached to the loan or grant etc actually prevents you from developing the business and you either get so much interference in your business by people that sell money for a living or quite the opposite you just get cash with no help at all like putting too much oil in the engine which has pretty much the same effect as none at all and can be just as damaging.
In the early stages of business development you will need the most help you will already know that raising a small to medium amount of money is very difficult to achieve.
It is here that you need a guide, someone who has been there before and travelled the road going down all the side roads and knowing by experience which ones to avoid and which are likely to get you to where you are going.
Part of what we provide you with at Leadsure is the ability to air these difficulties with experts who should be able to provide you with general direction with not just your IT but your broader business issues going forward.
We are in the main a friendly bunch of like minds who have come together to help small business enterprises move ahead down the road to success - and just like my analogy we dont want to be carrying too many passengers in our car - unless that is your chosen business line that is.
Happy Motoring.
© John Elsden 2007
John is the founder and Chairman of Allied Powers Limited, a management consultancy providing advice to Venture Capitalists together with management expertise in IT, acquisitions, and development for individual businesses.
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