All businesses need a source of funding. Whether you’re just starting out or you need some extra funding to fuel a new idea, you’ve got to look at the best options out there. Raising funds yourself is the best option as you don’t need to rely on anyone, you’re not in debt, and nobody asks for a slice of your business pie.
Nevertheless, you wouldn’t be in this position if you could afford to fund yourself! As a consequence, the next best option is to look for investors. An investor will pump a significant amount of money into your company in exchange for a share of your profits. In effect, they own part of your business, and the exact percentage will depend on your negotiations. Obviously, you want to keep it as low as possible, but that’s another discussion for another day!
This post is all about getting people to invest in your business. There are loads of millionaires out there looking for new opportunities all the time. So, how do you ensure that your business becomes their next endeavour?
Sell your brand & be professional
The first step is selling your brand to the investors. You need to make them feel confident that your company can a) be trusted, and b) has the potential to make a lot of money and connect with customers. So, spend time building and cultivating your brand image. Make it clear in everything that you do, and in all the things the investors see. When they understand your brand, it instantly lets them know if they’re in or out. If they hate your brand, then they’ll be out. If they love it, then they’re sticking around to see what else you have to offer.
A key aspect of selling your brand is ensuring you show your professionalism. Think about it from the investor’s point of view. They have a substantial sum of money, so they need to be sure that your business is genuinely professional in everything that you do. It’s okay to have quite a fun and relaxed brand image – you don’t need to be in suits talking in posh accents. But, you do have to show that you’ve got everything in order, you know what you’re doing, and that you have a professional approach to business.
One way of doing this is by putting on an exhibition or small event for the benefit of the investor. It shows true professionalism, and you can hire exhibition staff to set up a big stall where you can showcase your brand to the investor. It’ll be like a product reveal event, only to an audience of one!
Show them what they get out of the investment
A mistake many people make is you don’t focus on what the investor will gain from investing in you. Instead, you shift all the focus onto your business. While you should talk about your business and sell your brand, you really need to put most of your efforts into selling the ROI.
When you go to invest in stocks or shares, what makes you pick one over the other? The profit potential of the stocks and the risk level. The same thing goes through an investor’s mind when they’re thinking about investing in your business. Mainly, they want to know what they’re going to get out of this. Show them your profit projections to give them an idea of how much money you can make from your products/services. This needs to be very detailed as you’ll need figures, graphs, and so on. If they can see that big profits are possible, and that the risks involved seem pretty slim, then you’ve got a good chance of shaking hands and walking away with some funding.
Naturally, this process is easier if you’ve already started your business. In this instance, you can display accurate figures based on your business accounts and sales receipts. So, it’s not an estimate, meaning the investor has concrete evidence of your success – and the money they can make.
Provide evidence that your product has a demand
Going alongside evidence of profit potential, you need to show that your product actually has a demand out there. This is easily done by showing off your market research – which all businesses need as part of an overall business plan.
Your market research should be very detailed and demonstrate that there is a target market for your product/service. Not only that, but you need to outline what this target market is, so your potential investor knows the demographic you’re targetting. Again, this is much easier when you’ve already started a business as you can show details of your customers.
Showcase your marketing plan
Next, be sure to show off your detailed marketing plan. This will show the investor that you have a clear strategy to promote your business and make sales. It’s all well and good seeing your projected figures, but they need to know where these sales will come from.
Therefore, you have to spend a lot of time putting together a thorough marketing plan and strategy. Be sure to show a clear sales funnel that demonstrates you understand how you’ll create leads and then convert them into paying customers. This sort of thing is gold dust to an investor, they love businesses that know how to create sales!
It’s worth noting that your marketing plan, along with your market research, should all form part of a general business plan. It’s definitely a good idea to put this plan together and hand it out to the investor when they come and see your pitch. This was, they can take it home and deliberate over your business before coming to a decision.
Hopefully, these tips will help you secure the funding your business desperately needs. One final point; make sure you choose the right people to provide the pitch. As the owner, you should take responsibility and be part of it. But, ensure you have other members of your team – if you have a team – that can help you out. If someone is nervous and doesn’t pitch well, then don’t bring them with you as they can hold you back!
- This post has been written by an outside source – DISCLOSURE POLICY
