It is often exciting to be called a CEO, Founder, or your own boss until the challenge of getting funding rears its head. Sooner or later, every small business owner would need funds to go to the next level. There lies a test.
Having amazing ideas on how to take up your business some levels higher is sometimes not enough for its growth especially if those ideas often require financial investments that go beyond our limits. More than half the time, they do.
In this article learn how to attract investors to support your efforts.
Here are some tips on how you can have a reasonable shot at acquiring the funds your business needs to reach its full potential.
Practice Your Pitch:
Before you start discussing your business proposal with potential investors – friends and family or investors, you first need to get their attention. This is where the ‘elevator pitch’ enters the stage. The goal of an elevator pitch is to pique someone’s interest enough to say “That’s an interesting idea!”. With an arresting elevator pitch, you can have their attention, and then move on to schedule a meeting and have a real discussion.
This is all about documentation which includes;
Your business plan: This establishes what kind of marketplace environment you will be operating in, how to enter it, and what you’re going to do once you’re there. A five-year plan is a good place to start, focusing on details for the first year, and becoming more general as you go along.
Your Market Research: The first step of showing that your small company is worth investing in is to present the market it will be competing with. Your goal here is to show that you know who your key competitors are, what are the service standards, what the size of the industry is, and anything else that portrays you as an expert in the field.
Your Financial Details: This is the part where the money comes into the picture. What matters to investors is how much money they can make on the investment. That is why you need a good financial model. Hiring professionals to do an independent review of your financial solvency is a good way of showing confidence as well.
After you’ve gotten your documentation, there are other boxes to tick.
Work on extending your network:
One way to avoid being intimidated by approaching an investor is to cultivate a network rich in potential investors. If you have a pre-existing relationship with potential investors, the dynamic may be different when you approach them.
Remember, investors also invest in you. That’s why it pays to have heightened visibility and a positive reputation in relevant circles.
Build a strong brand online:
Investors are guaranteed to research your business before they commit to investing in it, so make sure what they find online is positive. If you can build up a community of supporters before you start pitching, that’s proof of interest in your project. Your site and social media accounts should be updated and professional to ensure positive first impressions.
Choose co-founders wisely:
Do you have a co-founder? If not, you might want to find one fast. They are a great way to complement your skills and background with anything you might be missing. If you’re the brains behind an incredible new technology, but don’t have any business acumen, a co-founder with a background in business will make your project even more attractive to investors. If you’re extremely resistant to the prospect of pitching, you might choose a co-founder that can be a confident spokesperson.
While there are no guarantees investors will decide to support you on the first try, adopting the tactics outlined above is sure to put you ahead of the competition.
Do you have any question or comment? Do share with us in the comment section.