The dream of every small business is to grow into a big firm and it is important to know that no matter how great your business idea is, without finance there is little or nothing that could be achieved. However, it Is a well-known fact that attracting investors can be incredibly difficult and time-consuming. Here are a few ways you can attract investors.
Outline your business plan
It is very important to have a credible and realistic business plan, especially for the goals for the first five years. Focus on the details for the first year. Understand that investors are busy people so make sure the business plan is concise (straight to the point, with facts, numbers and predictions). You can read our blog post on how to create a business plan to learn more.
Have a good financial model
Describe your revenue model in detail. Outline the expected cost, and give realistic predictions based on market research. Do a month to month forecast of expenses and revenue for at least three years. Also, ensure that your plan enables the investors to make money.
Do market research
It’s a well-known fact that there are no new business ideas, so it is important to have a “competitive advantage”. This simply means something unique that makes your product or service different from your competitors. This will serve as your selling point to both customers and potential investors. It will make them believe in your dream and vision.
Practice your pitch
The ability to sell your business proposal is also key in attracting investors. “An elevator pitch” would be the most effective tool at this stage because it is an attention grabber. When meeting with a potential investor be professional, polite, credible and confident. A wise investor can read through a person because an investor does not only invest in a business but also the owners of the business. Focus on why they would want to invest in you. Do your research on investors and think like an investor while preparing for a meeting. Ask yourself questions you would want to know if the roles were reversed.
Establish a solid brand
This is a very important factor in attracting investors. This simply means letting your work speak for you, focusing on quality and personality instead of quantity. Understanding that people are watching is very crucial. Every smart investor wants to put money where they can get value for the money.
Leverage social media
As we all know, technology and innovation are a big trend in the business world today. The world as we know is a global village and social media is a great place to help with brand positioning. This is a platform that can be used to show the world what you do. The publicity can create awareness and also attract investors.