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How To Attract An Investor To Your Small Business

Friday, June 18, 2021

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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