How to Get an Investor For Your Small Business Startups
Are you a business person who is working on a startup but lack the initial capital to kick start the project? Or do you need more investment capital in your business but can’t seem to get people to invest in your business?
Do you know that they are lots of people looking for business opportunities where they can invest their money and get back a good return over the next 3-5 years? If you know your business idea is profitable but getting people to invest in it is the problem, then, you already have a lot of potential investors to help you with that.
You don’t need to disturb your family members or friends to help you with loans. People will invest into your business if they know that their money will multiply in the long term. Therefore, to get them, you need to excite them with your business ideas.
You must convince them that the opportunity is sound, with little risk of failure and must address a large market opportunity.
On the basis of getting people to invest in your business, here are 5 tips that can help you;
5 Strategies to Attract Investors to Invest in Your Business
1. Making a Business Plan
This defines your business, market, potential customers and your goods and services as well as the strength of your management team. Before anyone will ever agree to invest in your business, he or she must ask for your business plan.
So, you should be ready to present your business plan to as many investors that may be interested in your business idea.
This is one way you can convince them about the business. The manner by which you present your business is sometimes more important than what you actually have to present. If your business is only just starting up and has not proven anything yet, you can convince investors about the potential of your business with the way you sell your business to them.
2. Demonstrate the Profit Potential of the Business
The best way to tell potential investors that your business idea is viable, is to show them the profit potential of the business. This guarantee potential investors that they are putting their money in the right business.
It will need you to do some market research to come up with numbers from similar businesses that are doing well in the particular market you are entering. Your angel will need to be convinced that your business will meet the market need and that there is a clear “barrier to entry” from competing companies.
3. Focus on the Relationship and Not Money
Investors are not money bank that you think you can just go and pitch for capital to invest in your business. If you focus mainly on the finance, that is where your investor will focus on and this will make it very sensitive because you are talking about their money here.
One way to get people to invest in your business, is to build a strong relationship with them. The kind of relationship you hope to build with your staff and clients. If you can convince them that you are sincere and genuine then it won’t be difficult to win them over.
Build relationships first and it will become easier and easier to find financing as you need it for future projects.
4. Be Confident in Your Approach
I know it is very difficult convincing people to invest in your business mostly when it is a startup and you don’t have any big proof to show that the idea will be profitable in the long term.
But, when you show a spirit of confident in your approach and in the potential of the business, investors will see this in you and will also be confident to put their money into your business.
You have to believe that you are a good manager, that you have the right skills and abilities to make the business grow, and that the business has a promising future. This is better than anxiously pleading with them or shyly asking them to make an investment.
If you believe in yourself, investors will feel confidence in you and in the potential of the business.
5. Show them your Marketing Plan
If you were about to test the market with your products or services and you have numbers to show for it, it will be wise to share it with the potential investors.
For example, if you did a PPC campaign ads on Google, you can present to them the number of clicks, page views and how many people were converted to buyers. Even if you made few sales, let them know that if more money were to be pump into ads, more people will be converted and the business will expand.
Let them know that you have also be tracking competitor’s marketing strategies and have found out the best way to beat them.
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- Sources of Business Finance for Entrepreneurs