Category: Business

Deepak Mandy is a business coach who has been building businesses Down Under all his life. From commendable expertise in the IT sector to a tight grasp on logistics, he has also been a mentor for budding entrepreneurs, giving genuine and effective business advice. As a business coach, Deepak Mandy understands the challenges that young, as well as seasoned businessmen, face while raising funds for their companies. It is true that the proper execution of an idea is what makes it work. Bringing good solutions to the masses has been Deepak Mandy’s forte ever since he entered the Australian markets and raising capital is one of the foundations of any good execution. This guide seeks to explore these challenges and how to overcome them.

Challenges in Raising Capital

Entrepreneurs come up with brilliant ideas and even have the right knack for executing them into practice. However, a slow or lack of cash injection at the right time is a major reason for many crushed dreams. Deepak Mandy suggests:

  • Investors are Dicey: It happens often that a verbal commitment given by the investors during a pitch is not followed up with a proper investment decision by the investors.
  • Lack of Urgency: Entrepreneurs often fail in creating a sense of urgency to the investor which results in a delayed reaction. The number of investors is less compared to the number of companies seeking funds – a major reason behind this issue.
  • A Declining Economy: You can’t do much about it, can you? Well, coming up with a market disruptive solution is the only business advice that would work here. Moving on.

Companies Eligible to Raise Funds in Australia

Public companies (a company with more than 50 shareholders that are not direct employees of said company) are eligible to raise money from the general public (IPO). The company has to declare securities before entering the public pool to raise money.

Private companies (technically the opposite of a public company i.e not more than 50 shareholders that are not employees) can also enter for raising capital:

  • From a private party such as employees, shareholders, or a subsidiary company.
  • If there is no disclosure document required, the private company can raise funds from the general public.

Restrictions on Advertising or “Cold Calling”

When a disclosure document is required to raise funds, cold calling or advertising to the general masses has restrictions and boundations. In the most general terms, it is not allowed to cold call people from the general public and tells them about the securities. There is an exception in this case though. Deepak Mandy suggests that you check this link out. Holders of the Australian Financial Services Licence can raise funds from the public. Do check the link for more information though.

Advertising securities, as aforementioned, is not allowed. However, if the disclosure document is lodged, the scenario changes a bit. You can start advertising for public funding in Australia after the disclosure document is lodged as long as there is a statement in the advertisement or cold call stating that:

  • Offers will be taken only with an attachment of the disclosure document
  • There is an application form in the disclosure document and anyone who wishes to infuse money should fill it out first.

Don’t have a disclosure document? The Right Time to Raise Funds is this

With years of experience raising as well as investing funds, business coach, Deepak Mandy has compiled some pointers for you in this regard. If your company does not have a disclosure document, the right time to raise funds depends on:

  • In case there is a personal offer. This also includes (a) offers made to less than 12 people in the course of a year and (b) the offer will not raise the total amount (in a year) above $2 million.
  • Offers are made to the person who is not eligible for a disclosure document.
  • There are also various conditions that are included in this category. For a detailed understanding of when you can raise capital without a disclosure document, check out the official link.

The right time to raise capital in case of the non-existence of a disclosure document also depends on where your business is currently and whether you have an execution plan in place. In simple terms, the allocation of the proposed incoming funds needs to be decided by the entrepreneur. Although this is not some mandatory step, it is absolutely essential for the entrepreneur to have a thorough understanding of where the money would be used and how much the returns will be.

How to Overcome Raising Capital Challenges

As a business advisor and coach, Deepak Mandy suggests that entrepreneurs take the following roadmap to overcome the challenges of raising funds in Australia:

  • Scalable business strategy: A scalable business strategy is one of the major factors that investors look into before injecting money into a business. Investors look for good future prospects before making a decision so a scalable business model is a must.
  • Market feasibility: Entrepreneurs and young businesses should not fall in love with their ideas and lose a sense of the real world. The feasibility and the problem-solving power of a business is the one thing that will keep the company floated in periods of crisis.
  • Having a realistic time frame: Unrealistic deadlines are also a reason for the failure of many young businesses. Business advice in this case requires entrepreneurs to keep a realistic sense of time frames.
  • Networking: Networking with high net individuals as well as good companies of the different industries is another key factor that will help you to raise capital.
  • Crowdfunding: Crowdfunding is another great way to raise capital if you believe that your idea is capable of motivating the general public to help you grow.

Conclusion

It is crucial to understand the place and time where your company stands before you start planning the next step. If you decide to raise money at the wrong time, it may end up hurting you more than helping you. We hope that this ‘Deepak Mandy’s guide to helping overcome capital raising challenges’ was mind-opening for you.

Establishing a new business can be amazing and challenging. You have to do market research, arrange finance, build contacts, secure a location, and perhaps hire staff. Before establishing your new business, it is recommended that you speak with an experienced business consultant about your new business idea. A business consultant will increase your knowledge and experience about the future operations of your business, as well as help you in creating a business plan.

Business Plan

People avoid writing a business plan because they believe it is too time-consuming or unnecessary unless they are seeking financing. However, the reality is opposite. Establish a business strategy before investing. It will help you develop a strategy, define your company goals, and determine the viability of your planned business.

A business consultant may develop a customized business plan for you or will evaluate your existing plan and provide you with useful suggestions on your business idea. They will identify any missing information or research on your behalf. Additionally, they will offer simple business advice on how to improve your company’s performance.

During the start-up period of the business life cycle, a business consultant will help you deal with the specific difficulties that arise.

● Building a strong structure– Identifying the most appropriate structure for you.
● Registration may be a hassle– With assistance, you may avoid the hassle of registering your company with the government.
● Budgeting and planning– can help you in developing a practical and effective company strategy.
● Accounting system– can conduct an audit of your current accounting system and provide recommendations for improvements to guarantee that your system generates accurate and trustworthy financial statements.

Benefits of Getting the Assistance of a Business Consultant

● Protect your company from making potential mistakes and spending money that isn’t required.
● Provide a properly studied business plan.
● Most up-to-date legal and compliance knowledge.
● Understand all aspects of running a company from start to finish.

What does a business consultant do?

A business consultant’s goal is to help an organisation improve its performance and growth by finding creative ways to achieve corporate goals. They are equipped to handle difficult business problems by developing solutions that will enhance the operational and financial health of any organisation.

  • Identify barriers to growth or efficiency
  • Determine the changes that need to be made and help implement the changes
  • Provide necessary training and resources to staff and management
  • Bring unique ideas to rejuvenate the business
  • Support in business planning and creation of new business
  • Implementation of new programs
  • Analyze the budget of a business, provide recommendations for changes, and assist in implementing such changes
  • Select suppliers and partners to help accomplishing goals

Strategy Development For Your Business

Strategy development approach of a business consultant ensures that short term activities are aligned with long term aspirations, vision and purpose. Through market research and business analytics, they identify key issues, opportunities, and threats that affect an organization’s business model.

They collaborate with you to define and develop your organization’s fundamental mission and vision, as well as define the critical strategies necessary to achieve them. Then they plan, prioritise, and organize key initiatives into a roadmap with short-term, mid-term, and long-term goals.

This guide is intended to facilitate international investors and organizations looking to establish a company in Australia.

Global Investors must take several factors into account when deciding how to enter the Australian market or establishing a business in Australia. In general, investors must decide whether to form a new company, register as a foreign company, or expanding an existing company.

When starting a new business, there are several business structures to choose from, each with its own set of regulatory and tax considerations. Businesses may also need a trademark, and online, and/or a physical presence to establish their identities.

The Australian Government provides a wealth of online information to assist investors in making decisions that are appropriate for the nature of their business.

1.Choosing a business structure

Australian Government has a set of common structures that Investors can utilize while building up a business. Sole traders, partnerships, trusts, and companies are the four primary types. 

Financial backers must carefully consider cautiously which design is best suited according to their business requirements. The business structure will decide the necessary licenses for work, tax and legal implications.

2. Set-up an Australian company

Global Investors keen on entering the Australian market may wish to set up another Australian company or build up another Australian subsidiary that additionally works as an Australian organization. 

Australian organizations are consolidated organizations that are additionally distinct legal entities

Organizations in Australia should be enlisted with the Australian Securities and Investments Commission (ASIC).

3.Enrolling as a Foreign company

Foreign entities may wish to carry on business in Australia as a Foreign organization. The Australian Securities and Investments Commission (ASIC) traces the rules which characterize Foreign organizations and the rights Foreign organizations hold in Australia. 

4.Procuring an Australian Company

Procuring an existing Australian company could be a better option than forming a new or subsidiary company.

The Australian Securities and Investment Commission (ASIC) regulates business in Australia. ASIC maintains a record of all regulatory and guidance documents pertaining to corporate takeovers. Investors interested in owning an Australian company should refer to ASIC acquisitions and rebuilding operations.

Foreign investors who want to acquire Australian companies may need to request a formal proposal. Investors need approval from the Australian Foreign Investment Review Board (FIRB). FIRB reviews plans and advises the Australian Government on whether they are appropriate for acceptance under government policy.

5. Listing on ASX (Australian Stock Exchange)

Both Australian and global organizations may apply for listing their business on the ASX. To get and keep an ASX posting, organizations need to meet the recommended necessities set out in the stock exchange posting rules. This includes organization exposure and detailing necessities. 

6. Enrolling a trademark and domain name

Organizations entering Australia will need to protect their rights and keep others from utilizing their name by enlisting a trademark and domain name.

These times are demanding individual businesses today to be resilient in terms of their operation. With the increasing demand of consumers and the loss of staff and resources the situation could get catastrophic for the businesses.

Businesses also have the opportunity to restructure their entire business. It could be either outside or inside a formal insolvency process, but outside insolvency is more preferable.

Businesses also need to cut costs of their products in order to make way for profit and increase their sale all while competing with other businesses.

Assuming that the covid-19 crisis is over is the biggest misconception anyone could hold, including businesses. Businesses need to remember the lessons learnt during the pandemic and apply them in this post-pandemic period. They must also manage to maintain the staff energy level and staff morale during these times for smooth operation.

With the work from home situation, it is also required for the businesses to invest in the best home-based technologies and connectivity.

In terms of supply chains, it is also recommended to reevaluate the supply chains and restructure them to be more flexible and agile and to prefer near shoring strategies. In order to predict the new consumer demands and behavior, businesses also need to adopt intelligent sensing capabilities.

The pandemic has literally affected every sector, businesses and beyond. But all that is under ones control in how one manages to adapt and implement best practices in order to survive through these unprecedented times.