Courting Investors to Grow Your Business

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It’s all well and good to have a small business that’s founded on a strong idea or product. The difficulty that many entrepreneurs face is try to come up with the funds to make their dream into a reality. The most obvious route for many is to find someone who is willing to invest their own money into a business. Investment doesn’t come without risk, though and trying to convince to share in your dream is an art form unto itself. If you’re wanting to try and gain some extra money for your business, here’s a few things consider.

Strike the Right Balance

Going in too hot and heavy with your proposal can be the biggest turn off to an investor. You only need to have watched 5 minutes of Dragon’s Den to know that investors are put off by a shake-down. If you get a sense early on in your pitch that your potential investor is not at all interested, don’t waste any time.

The qualities that an investor does want to see is drive, expertise, and enthusiasm. Blending these three attributes into your pitch shows that you know exactly what you’re talking about, you believe in your product, and you’re going to give a return on whatever you’re given. Remember that what an investor wants is more money out than they put in, and this might be different from your own goals.

Know Your Business Plan Inside Out

Nothing will drive investors away with more ferocity than a lack of knowledge on your part. Don’t even consider approaching anyone for investment until you have a fully realised business plan that takes into account the various challenges that you might face in the initial difficult period of growth.

Different investors will want to know about different parts of your business, and being caught in a position where you are unable to give them basic information on how you plan to use their money will lead to disaster. Luckily there is all manner of useful resources online that are designed to help you develop a business idea and you can do research into the different things investors want to know to ensure you won’t be caught out in a pitch.

Think about What Your Investors Want

It’s easy to get bogged down in the idea that investors want to buy into your business in the same way that they do. As mentioned above, the reality is that people invest as a means of making a bit of extra money, be it for retirement or a large planned expense at some point down the line. Reassurance of their money is key at the pitching stage, but you don’t want to pull the wool over anyone’s eyes. A little transparency will go a long way and you will earn the respect of investors in the long term.

By all means, assure them of the potential of their business but let them know that the value of the income from their investments will possibly fluctuate from time to time. This is perfectly normal at any stage in a business’s growth and a little honesty will go a long way for you. Keeping your investors in the loop will go a long way to helping gain that much need investment needed to grow your business.

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Friday, 16 November 2018
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