This Tuesday, I will have the honour of moderating the monthly session of the Jerusalem Business Networking Forum (JBNF). The theme will be “loans for small businesses”. A panel of three interesting speakers, promised attendance number doing well, a leading bank that wants to sponsor the event – everything looks set for another fantastic meet-up.

This topic is specifically pertinent to the JBNF, which has been hosting meetings now for over six years. As the name says, the group encourages and facilitates commercial activity in the Jerusalem region, deliberately using English as its primary language of communication. It is not just that many have found employment through our contacts. Businesses have leapt forward. Service providers have found new customers. Investments have been brokered. And all this with an emphasis to help the start up-to-medium sized corporation.

As I was preparing my notes for the event, Sui Ling Hui, a colleague from Australia, drew my attention to an article in Forbes magazine. Entitled “5 things for start ups to do when raising capital“, it was penned by Dave Samuel, who is a serial investor and who has posted at least 10 successful exits – and presumably still counting.

Samuel’s thoughts are those of a person who is involved daily in the decision-making of finding new financial resources. They deserve to be read in full. That said, he is only one player in the field of many. By the law of nature, other investors will take different perspectives, and this will be true if you are involved in high tech or trying to set up a production plant or a non-profit outfit.

I suggest two alternative but generic lines of approach:

1)  In everything you strive for, try to do, present or touch, demand excellence form yourself and those around you. Look to be the best. Do not offer shoddy power point presentations, displays that  do not work and lines of argument that have not been tested in prior debate with colleagues. Bottom line; If you go into a meeting with an investor not as prepared as you can be, the chances are that you will fail in your mission to secure funds.

2) It is crucial that you understand the difference between three financial concepts; budgets, cash flow, and profitability. These are terms that are often loosely banded around. All three are linked, but each has a different meaning an implication. In my experience, two of the most common misunderstandings in business are:

• Many fail to realise that a budget for a given period of time does not mean that all total income and / or expenses will flow and match the same planned numbers.
• In parallel, every year many a CEO looks in bewilderment at their accountant, who announces that the company has made a profit (on paper) – even though there is a gaping hole in the current account at the bank. Ouch time!

To be blunt: If you appreciate these complexities, you will be showing your investor that you are somebody who has the potential to create and develop a sound, cash-rich business.