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How To Attract Investors To Your Small Business 

 April 21, 2022

How To Attract Investors To Your Small Business

Levelling up your small business can feel daunting, especially trying to secure that crucial investment to help develop your new unique ideas. This article will show you how to attract investors to help you take that next step.

Securing financial capital goes hand in hand with boosting growth for small businesses. Dragon’s Den and Shark Tank wouldn’t exist if this weren’t the case. It gives a small business the chance to increase its output and utilise things such as digital marketing. An excellent way to increase a business’s monetary assets is to find outside investors. Investors will give your business money if they see promise in hopes of seeing a return on the investment later down the line.

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There are many ways by which you can increase your odds of landing an investment deal. Some investors will require persuasion, and others will require concrete proof. Neither can convince investors, but using them together can give your business a shot at securing that much-needed investment. Here are 6 ways to help your small business attract investors.

Practice The Pitch

An Elevator Pitch is a short pitch about your business to help garner the attention of a potential investor. It should be short, concise and attention-grabbing, all in the length of an elevator journey. The purpose of such a pitch is to pique someone’s interest for them to say something along the lines of ‘I like that idea’. After that moment has passed, you can schedule a meeting and sit down to talk.

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Present Market Research

Market research is the foundation that most businesses are built on. Market research is exactly as it sounds, researching the market to make sure there is a need for what your business is planning to offer, and it will be part of how the business is valued. The primary purpose is to show companies in the same field which provide similar services to the ones you plan to offer and keep them in mind when building your own business. What are the sizes of those businesses, what is the standard of service and any other points that show investors that you are an expert in the field?

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Outline a Business Plan

After laying the foundation of the market environment you plan to enter, it will be time to show potential investors your business plan. This plan should entail how you plan on entering the market, what you plan on doing once you are there and what will be unique to your business to help it stand out. This business plan is not set in stone but should be detailed enough to offer a whole picture of the company and where it is going. Most business plans start with a five year plan, with the first year being very detailed and the subsequent years becoming more general.

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Specify Financial Details

Money. Money is significant to investors. They want to know they will see a sizable return on investment. That is what is most important to them rather than the ideas you may have. A good financial model is needed with details on the revenue model, expected costs and profit predictions based on the previous market research. It should show that you are competent with money and know what you are doing. Professional creditors can be an excellent way to review your financial solvency independently, and it is an excellent way to show potential investors your confidence in your business.

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Sell Your Product

Trying to convince investors that you are a knowledgeable and savvy business person is only part of it. Investors are looking for the next business idea that has the potential to shake up the market. They are looking for the new Uber or Tesla. It would be best if you made your product stand out. What makes it different? What is its USP (unique selling point)? Something like ‘aerodynamic efficient cars’ does not mean anything and will not pique an investor’s interest; however, ‘aerodynamic cars with up to 45% fuel efficiency and 50% lower production cost’ might.

Find Your Audience

Do you have an audience for your product or service? As good as it might sound on paper, this will be the question that will determine if your product is a success or not. Investors are very much aware of this fact, so they will not invest unless they can see an audience you have in mind to target. If the market research was done correctly, you should have found the types of people willing to pay for your product or service, and after that, you should have created a strategy on how you will reach this audience. It is very optimistic to believe putting out a good product will cause people to come on their own. Proof is needed as well as a strategy to market your product.

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Following these steps can help increase the odds of investors investing in your business. It is, of course, not a guarantee; however, this can significantly increase your odds. If you don’t get it the first time, you can always learn from it, streamline it and improve with every pitch.

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