by Markus Thiel and Hannes Krüger, unitcell, March 2014
The German economy is humming and many companies, especially young ones, are developing splendidly. In Berlin, for example, the willingness of companies to invest has risen continuously in recent years. However, demand and borrowing is lagging behind. Innovative business models have emerged here in the past, particularly in the retail and services sectors, and these are on course for growth. Often, these companies require a great deal of explanation on the market and service side, are complex and have an international focus from the outset. Reliable benchmarks for their evaluation are currently lacking.
Transformation to a growth-congruent financing mix is a strategic task
In this process, many companies face the challenge of having to successively develop their financing from a strongly equity-based structure to a conventional financing structure that sensibly combines different forms of debt financing and, where appropriate, hybrid forms of financing. In this context, it is not only important to cope with acute growth in terms of liquidity, but also to gain long-term scope and thus decisive advantages in future competition with the help of a growth-robust financing strategy. The financial strategy should offer scope for ad-hoc investments in the market and the business, as well as being able to cushion growth or earnings dips, which are actually to be expected in every company in this development phase.
Recipient-oriented communication is also the be-all and end-all in financing
However, a major difficulty in raising debt or hybrid financing is that these investors function differently from equity investors - who often have an affinity with the industry - and young companies often first have to learn how to deal with them.
Even the targeted clarification of the business model with its strengths and weaknesses as well as opportunities and risks is not easy. It is also often a challenge for the commercial departments to satisfy the hunger for information efficiently and in a manner appropriate to the recipient when initiating business. In this context, the current developments in the context of Basel I to III, the increasing formalization, but also the increasing pressure for efficiency in the banking sector do not make it easier to find suitable partners. The fact that bankers who want to generate business in this market environment also suffer from this does not help much at first. However, experience shows that in many cases it is possible to develop suitable financing solutions and convince financiers to enter with an individual business plan tailored to the needs of the respective financier class, which forms the guideline for negotiations.
With unitcell to financial strength and competitive advantages
In order to support these companies in successfully continuing their growth course, unitcell has developed a modular service portfolio under the heading "Making business models bankable", which is becoming increasingly popular with customers. Here, the company's own cash reserves are discovered, adjustment requirements with regard to corporate management are identified and skills in dealing with banks & co are improved.
Together with unitcell's consultants, who are experienced in a wide range of financing situations, entrepreneurs can develop a financial strategy that is bankable and prepare their documents for the implementation of this strategy quickly, efficiently and coherently. In doing so, unitcell complements the company's preliminary work and capabilities where necessary. We coach and manage the creation and - if desired - also the acquisition and negotiation process. Beyond the conclusion of the contract, we are also happy to assist with further communication and information exchange.
The increasing number of closed financing deals for commitments originally considered difficult to finance confirms the entrepreneurs who have invested in their financing - for example by commissioning our firm. Because - and this cannot be emphasized often enough - strong financing is now more than ever an essential competitive advantage.