How to Get Investors for Your Small Business
If you’re looking to expand your small business, you may be turning towards investors to help you fund this great endeavor. In order for a private investor to consider your small business, you have to convince him or her that there is a reason for them to invest in you. You mush demonstrate that your business is fiscally sound, has potential to grow, and that it will only benefit the investor to become a part of this great opportunity. However, in order to get investors to loosen the purse strings, you will have to be willing to subject yourself to increased scrutiny and to give up some control of your business. Investors are not giving out free money – they will have a say in your business’ philosophy and actions. Of course you will also have to hand over a percentage of your company and its earnings to the investors as well.
In order to get investors on board with funding your small business expansion, you will need to write a clear and informative business plan that you can share with them. Your business plan should include the following information:
A Demonstrated Demand. Use real statistics and reports to show that there is a growing need for your product or service. You will have to show how your business fits into the market now and how it will fit into the market in the futures.
A Show of Strengths. Show your specific experience in the business you operate. Explain how your company fulfills a particular niche. Pinpoint information that will show investors that you are successful and your business will continue to grow and succeed further. Show your determination to make the business work as well as your track record for previous achievements.
A Clear Budget and Fiscal Stability. Come up with an accurate budget for your company that demonstrates how the investor will be involved in making the business work financially. Make sure that you include how and when the investor will be compensated financially for his or her part in the business.
If you are seriously considering going after investors, you should probably also have a mentor. An experienced mentor who has operated in your industry and has been through the process of courting investors themselves can greatly add to the viability of your efforts. Not only is having a business mentor valuable for adding legitimacy to your efforts and helping you avoid classic pitfalls, but in the long run their shared experience can help your business grow more quickly through galvanizing your own organizational efforts and those of your employees.
Photo Credit to Tax Credits on Flickr.