Investment Readiness

In the private sector, investment-readiness has been defined as the process of providing potential investors with sufficient information, credibility and trust to motivate them to invest in a proposition.   In the final analysis, the decision on whether or not an organisation is 'investment-ready' lies with the investor and  necessarily involves an element of subjective judgment  that balances  the investor's view of the organisation with the degree of risk the investor is willing to accept.

The SIF appraisal process assesses an organisation's investment-readiness using a matrix that examines the organisation across four broad areas to identify strengths and weaknesses in specific characteristics, and enables a balanced assessment of the principal risks associated with the investment.  The use of the matrix ensures that assessments of the investment-readiness of  different organisations are conducted within a structured, evidence-based framework that will allow conclusions to be drawn in a consistent  manner.

The matrix builds an investment risk profile by examining four main areas:-

Business Model

Issues considered include market awareness including the quality of market research, competition, customer and supplier relationships, and the physical resources  of the organisation.   This involves an appraisal of its human resources in addition to considering aspects such as the adequacy of premises, workspace, and equipment.

Organisational Development

Aspects such as leadership are considered, along with the mission of the organisation including how it has been developed and communicated.   Business planning and target setting are examined along with the degree of staff involvement therein.  Risk management procedures and control of the business process are also considered in addition to compliance with any relevant legislative matters including data protection, health & safety, equal opportunities etc.

Finances

The quality and frequency of management information is examined, along with other aspects such as the scale and nature of income and expenditure, profitability, cash flow management, funding resources, etc.  The 'reasonableness' of the assumptions underpinning any financial projections will be closely examined.

Social Outcomes

The organisation's awareness of the social impact achieved by its operations, and the processes in place to record and monitor social impact are examined along with such aspects as awareness of and 'fit' with local or national priorities.