Ask Jo Malone: What to consider when fundraising for your business

Small business agony aunt Jo Malone explains how to build a luxury brand and what to consider when it comes to finding funding.

Dear Jo

I am a Spanish entrepreneur and have developed a business plan for a luxury fashion brand.

I am keen to expand in the UK, given the strength of the market, and am looking to set up meetings with banks in Spain and the UK.

Is this the best route to finance?

In the UK, the luxury market creates more than $50 billion (£33 billion) every year.

At least half of this is generated by the fashion industry, so you are right in recognising that the opportunities are strong.

It is great that you’ve put a business plan together but do you also have your product designs and samples available to show prospective investors?

A business plan is so much more than just a document and graphs on a page.

Anyone willing to finance your idea will want to see and touch your products and guarantee the quality.

Going straight to the banks is a good place to start but remember there are other routes such as business angels, crowdfunding groups and even venture capitalists.

Understand what each option has to offer and its cost—ownership, equity, management and so on — before deciding which lead to follow.

You are going to be busy over the next few months and will experience the highs and lows of brand-building.

It is vital you keep in mind the basics of developing a luxury brand, which are creativity, craftsmanship, consistency and quality of the product, along with a voice of integrity and trust that rings true.

Good luck and stay true to the dream, not the dollar!

Gordon Merrylees, head of entrepreneurship at NatWest, says: “Applying for finance can seem daunting for a start-up but speaking with your bank can help demystify this process.

“You should develop a comprehensive and robust business plan. This should also articulate your vision for the business, along with your goals, targets and objectives.