Selling begins with communications and we are all in the business of selling. Each time we communicate we must put our best foot forward and assume the world will read what we write and say.

One of the essential business functions is the preparation of reports. Reports normally are a substantial communication with an intention to provide advice/interpretation and information leading to an action. Whilst some reports by their nature are bland and simply contain numbers, most of the reports we do require people to want to read so we need to provide a little more “meat on the bone”, so to speak. As companies seek to raise both equity and debt in these times, they need more than historic accounts – they need financial models, business plans and presentations for government funding, equity investors and debt.

Most companies who come to Projects RH are seeking a partner who works beside them like they work in the business. We often describe ourselves as a mix between a locum CFO and a contract or corporate treasurer.

Our Approach to Report Preparation

In essence, we work with the management team to help them to produce what they need in order to engage with the financial community. It is important to understand that we provide guidance but not direction.

Our journey in working with a client generally involves us preparing the following:

1. a financial model
2. an information
3. memorandum
4. a pitch deck (slide pack)
5. a teaser,
6. business plans
7. term sheets

Based on what we have prepared above, we work with other parties to produce:

1. specialised business plans
2. offer documents
3. presentations to early stage venture capitalists.

The first thing in our process is to require our clients to clarify their own ideas. It is amazing what putting things down on paper (or in a MSWord document) does to clarify the thinking of founders, their boards in early-stage investors.

The process which we undertake necessitates clarity of thinking with the outcome being a clear direction for the business. Realistically, it is difficult to reduce a financial model if you have not agreed the inputs. This puts the rigour and discipline into the thinking of founders and entrepreneurs.

Many visionaries find themselves too busy leading to engage in the processes required to produce the required reports for investors unless they engage a party like Projects RH and commit to the process.

On the other side of the early-stage, investors, professional investment organisations, family and friends plus banks, received great benefit from the clarity of thinking required to produce these documents:

Information Memorandum

Our process begins by meeting with the founder/entrepreneur and hopefully their existing advisers so that we can be briefed on the first cut of the financial model. Having produced the financial model, and having discussed it with them we have the materials to produce the first cut of an Information Memorandum. Often this first cut has a number of blanks which need to be filled in. As we work with the client through finalising information memorandum, we continue to update the financial model.

Financial Model

We realise most potential investors and even advisers need something more comprehensive than the financial model and information memorandum. The level of complexity of each financial model is governed by the project the client is pursuing.

Pitch Deck

The third step is we produce a pitch deck more commonly referred to as a slideshow. We try to keep the pitch deck to 16 slides and we try to keep those 16 slides to no more than eight lines a slide and no more than five words us a line, with photos, tables etc. all included in the 16 slides. Believe it or not, saying a lot in very little words is a massive advantage.

Teaser

The final document we produce in the first stage is called a teaser. A teaser is a one- or two-page summary of everything with a focus on being easy to read by a potential investor. We know from experience on both sides of the table that unless you win the investor with the teaser that they are unlikely to accept a meeting invitation or read anything else. We need to reiterate these documents do belong to the client but we do provide guidance and generally they listen to our suggestions.

Business Plans

When a company requires a distinct business plan, we call on the services of Dr Warren Harmer at The Business Planning Company. Whilst Warren is based in Melbourne, he has team members across Australia who can deal with local issues as they may arise. The preparation of a business plan generally denotes a need and in our brief to Warren we would stress the purpose of the plan. A business plan is generally critical in explaining your strategy to banks and investors.

The Package

What is important is that the documents all say the same thing. It is important that the financial ratios that are generated in the model are the same in each of the information memorandum, pitch deck and teaser. This means that each time there is a change in the financial model that the documents need to be updated. Other important things include logos, directors email addresses… To this end we employ a strict protocol on document numbers and sequencing.

Based on our years of experience we do have templates and guidelines which we use to assist our clients to get the best value on an investment they make in having us work with them to prepare with them for their fundraising.

Our clients very much appreciate the efficient process we have, this providing they have access to the material we request.

Concept Marketing

Carmenza Hoyos Llano has degrees in textile engineering and fashion design, but a heart which is purely marketing. She brings her expertise in image management and brand recognition to each of our communications. Carmenza is a strong believer in the fact that we need to build the profiles of our CEOs as well as our corporate clients. We prepare each of our communications consistent with our client’s corporate objectives for the image of the company.

Digital Marketing

We are very fortunate per our activities are supported by our digital marketing team based in Cali Colombia which is led by Anna Cristina Bueno. AnnaCris is an American-educated professional journalist. She is a marketing, communications and foreign affairs professional with 25 years of experience in customer relations, media, PR, corporate communications, promotions and customer development, relationships and retention strategies. Her focus in the last ten years has been in the areas of CSR, social marketing, community communications and branding. She leads a team of four which provide our client group with social marketing and image building. All key in getting and retaining investors.

Video presentations

An ever increasingly important part of clients reporting and communication strategy is to use a video as a means of providing short and distinct communications to selected audiences. We are very pleased with our strategic partnership with York Studios based in St Kilda Road Melbourne, York Studios is led by Stuart Gosling who provides quality input into the structure of video presentations so that they meet the needs of companies communicating with investors.

Audiences

Once our clients have achieved their goal of raising their reporting, obligations do not cease. Of course, they have reporting requirements which means they must provide information to the Australian Stock Exchange (ASX) Australian Securities and Investment Commission (ASIC) and others including the Australian Taxation Office (ATO). We do have members of our strategic alliance community which can assist with the preparation of ASX, ASIC and ATO returns. We work with investor relations consultants to promote the image of the company and ensure that it reports in a clear and accurate way so as to keep investors and potential investors informed of their activities.

Generally, our clients are mindful that they will need to return to the market to raise additional funds so they cannot ignore either their existing investors or potential. Most of our clients adopt the attitude that they are forever raising funds and therefore need to be prepared at any time to seize the opportunity to raise more money for the business on paper terms. Most founders and inventors are incredibly optimistic, and therefore incredibly fun to be with, they are often not however the best people to communicate with investors on a regular basis.

“Part of our role in working with our client base is to ensure that they are across not only their obligations to report but the opportunity to communicate with their stakeholders to ensure that they are there for them when they need them next.”

Conclusion

Reporting is a journey as well as an obligation. If we are able to communicate our message well and we have a good message the client should have the tools required to raise funds successfully. An important part of our role is to mentor the client and ensure they continue to communicate with the market effectively. As they grow so does the need for their communication strategy which reflects their ongoing need for funding.

Reporting provides us with an important insight into the business and for many leaders, it gives them a needed plan.