Cambridge Cluster

Image via Wikipedia

Mark Lock, MD of Peterborough engineer and fabricator Midas Technology is featured in a DT case study on the bank’s unwillingness to back small-scale engeering companies.

It is rather a confusing story as Midas appears to be a good company that has run into problems by spending, over the last five years, £350k on developing a new water-saving valve.  £350k is serious money an no wonder that a small company is having problems with the cash flow.  To me, the banks are correct in not being supportive of someone who is not following the essentials of running a business in the current times and keeping a strict control of cash flow.  Everyone would like to develop a dream product and get away from being a contractor.  The options are to obtains grants before starting development, produce a prototype and get up front payments from customers or, thirdly, raise some equity funds and good management.

The three experts talk about funding alternatives such as factoring/invoice discounting – not suitable for R&D – and only skip over equity funding.

At all times, let alone the present times, it is so important to put the dreams to one side and settle on a “boring” business plan and then see if there is enough spare management time let alone cash to follow a dream.  We angels in Cambridge know how difficult that is!