Many small-business owners find themselves in a position in which they realise they need to find an investor. Your investor will likely be able to provide you with the funding you need in order to take your business to the next level. When it comes to finding and securing the right investor for your company, it can be difficult for small-business owners to work out where to begin. Finding an investor does not have to be an elusive, seemingly impossible task; with the right know-how and initiative, it is not too difficult to attract an investor to your small business.
1. Create an
Eye-Catching Pitch
The first step to attracting the
attention of a potential investor is to create an eye-catching pitch. Your
pitch needs to grab and hold the attention of a potential investor, while
providing them with the information they need to know. You will need to demonstrate
what makes your business unique in today’s crowded marketplace. Your pitch can
help you to get your foot in the door and start building a relationship with a
potential investor, so make sure your it represents your business’ full
potential.
2. Get Your Business
Finances in Order
Before you begin your search for
investors, it is vital that you take the time to get your business finances in
order. Your search for investors is important for two reasons. Firstly, you
will need to be completely upfront, honest, and transparent about your business
finances. If you have been found to have been dishonest about your business
finances (even if this was a result of confusion rather than intentionally),
you could be legally liable. Secondly, an investor will not want to come on-board
with a business that has poor finances.
Therefore, you should take the time to
review your business finances. If you find that they are not as expected, then
now is the time to make changes. If you have a business loan you will
need to ensure that you have a clear repayment strategy. Once you have a clear
position about your business finances, you can begin approaching investors.
3. Write a Business
Plan
You are not going to attract an
investor if you are not able to provide them with a business plan, it’s as
simple as that. A business plans shows an investor exactly what it is they are
putting their money into. Specifically, your business plan should detail the
expected expenditures, the strategies that will be used, and the predicted return
on investment. Creating a comprehensive plan will show an investor where their
money is going, and this information will enable them to make a more informed
decision about whether they invest and the amount they spend.
4. Be Willing to
Share Your Company
It is common for an investor to ask
for a large percentage of your small business in return for a large injection
of capital. Before you begin your search for investors, it is worth considering
what restrictions you might put on them. For example, you will need to decide
if you would be ready to welcome in a new partner. Deciding
beforehand is critical, as it shows professionalism and is respectful of a
potential investors time and interest.
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