A major issue facing small and medium enterprises (SMEs) is access to finance. Whether it be for expansion of an existing business, acquisition of a new business or purchase of plant and equipment, the appropriate finance or capital base is critical. But businesses seeking finance or capital need to be ‘investment ready’ in order to have the best chance of obtaining the funds needed for continued development.
No matter where a business is placed in its cycle of evolution it needs to consider whether it has the attributes of being investment ready.
When addressing the issue of being ‘investment ready’ business owners/management need to focus on all aspects of the business, from the business plan and management controls, to information systems, employment issues and matters of corporate governance.
The SME Sector
The SME sector in Australia encompasses over two million businesses and accounts for over half of the output of the private sector, and tends to be a major source of innovation in the economy. Generally speaking, this sector is represented by businesses with an annual revenue of less than $50 million. Collectively, these businesses are vital to Australia’s economic welfare and contribute significantly to our export effect. Within this sector of the Australian business market are different segments; some businesses in a start-up phase, some are emerging and others are more mature in their stage of development.
All SME businesses need capital to grow, and therefore it is essential that every SME is investment ready.
The ‘investment ready’ process
Being ‘investment ready’ enables a business to be in the best position to obtain or increase its access to finances.
A business can address its ‘investment ready’ process under a range of main focus areas:
- Strategy and planning
- Operational issues
- Internal controls
- Financing transactions
- Taxation matters
- Corporate law matters
- Employment issues
- Information systems
The key to addressing the above matters is to ensure that there is the appropriate expertise to address these areas. Where the expertise does not exist within the organisation, it is essential to ‘tap into’ the appropriate external support from professional advisers or independent directors.
Crowe Horwath, being part of Findex, are specialists in helping businesses become ‘investment ready,’ and we have a track record in enhancing the value of our clients via the delivery of a broad range of services to the SME sector. If you would like further information on any of the above focus areas, contact your Crowe Horwath adviser.
By John Haydon, Senior Partner – Audit & Assurance