Business advisory firm Funding Nav offers a ‘one stop shop’ for businesses who want to grow quickly but find the funding options currently available to them confusing. Here, Stephen Sacks, who has 30 years of experience in acquiring and selling businesses, explains the key things for business leaders to consider when applying for funding.
What is the business, when was it started and what were you doing beforehand?
I founded Funding Nav in 2017. We are an advisory and growth facilitating business, aimed at entrepreneurs and SME leaders that have more ambition than cash. The business delivers real-time advice that truly helps business looking to raise finance as a means of improving profitability and liquidity. Oftentimes, start-ups fail because they are not able to move quickly or dynamically enough. Better cash flows mean businesses can scale more efficiently and effectively, and with a better chance of sustainable growth. Before Funding Nav, I had a career spanning 30-years in fashion furnishing and logistics where I bought, sold and set up businesses.
How did you get the idea, and what opportunity did you see when you started the business? What are your sales and what do you expect the turnover potential to be?
Funding is confusing to many business leaders, there are simply many choices so it’s easy for business owners to feel overwhelmed by the prospect of applying for funding. The challenges include whether to take on any funding at all, if so how much and what to give in return i.e. equity or debt and from whom and what level of involvement they should have. Often these answers are not obvious and sometimes the question being asked is entirely wrong. This is why I setup Funding Nav as a one-stop shop for business to decide on a strategy that will deliver their goal at the lowest cost and lowest risk.
When I was running my own businesses, I got a real kick out of resolving, seemingly impossible, funding issues. Funding Nav came about because funding was the area of my businesses that I enjoyed most. Honestly, funding is a sales and marketing exercise but aimed at potential investors and lenders rather than customers. I think that the fact that I am not a banker or an accountant but an entrepreneur myself is one of the two main factors that makes Funding Nav stand out from its competitors.
I was often approached by advisors that needed help for their clients, and while it wasn’t a source of income for a while, I was seeing transformational change and growth in the businesses I was guiding. My client base grew quickly, and it made sense to launch a dedicated company. Revenue in year one was small (approximately £200,000), but in the second year we grew to over £1 million. Revenue is earned by either commissions or advisory fees.
How did you finance it and what were the challenges of that?
The business asset itself is light and therefore no funding was initially required. This meant that Funding Nav was cash positive and profitable from the first month.
What were your key marketing strategies?
The most important marketing strategy has been Funding Nav’s presence and demonstrative system. As a business advisory firm, Funding Nav works in all sectors and with all SME business sizes from start up through scale up and turnaround. I have capitalised on the opportunities LinkedIn offers, which has allowed not only us to reach target prospects easily, but it also allows us to publish content like thought leadership, videos, and opinion pieces which are directly targeted towards our key audience of small business, SMEs and entrepreneurs. The publication of my book this year, Reboot Your Business, has also helped our closing rate as it offers a new layer of credibility.
What is your main revenue stream?
Funding Nav’s main revenue streams are primarily commission based. We also try to cater and tailor our service to the client as much as possible, so we have a few retainers for short-term work.
What are the main challenges you have experienced and see?
Brexit is a massive challenge for all businesses today, so funding is understandably a concern for small business owners which is why Funding Nav is and will continue to be a useful resource. This is because we exhaust all routes that might deliver FREE cash first before considering equity and debt raises. These include tax credits and grant funding but sometimes the answer might literally be an internal issue within the businesses profit and losses or balance sheet, such as putting up prices, dropping the cost of customer acquisition or liquidating inventory.
However, with many challenges, it’s important that we try and scope any opportunities that could come out of it. I’m very lucky in that there have not been many business advisory challenges in launching and growing Funding Nav, and I credit much of this to the fact that funding and access to capital are so popular among young and growing businesses, which increases demand for our service.
What advice would you give to early-stage businesses looking to disrupt markets?
Be conservative in your forecasts and valuation. Remember a bird in the hand is worth two in the bush! I also think that the biggest lessons I have learnt are that most businesses can get much more out of their existing resources and that some businesses are solely concerned with fund raising rather than revenue and profit generation which is much more challenging.