The Key To Getting People To Invest In Your Small Business

The cost of starting a business today may or may not be overtly expensive, depending on what angle it is being challenged from.

An internet entrepreneur may argue that it is a lot cheaper because, they could easily run targeted Facebook Ads at a greatly reduced cost and get weigh higher conversions, as opposed to putting up extremely expensive Ads on billboards that may yield no results.

A brick and mortar store entrepreneur may argue the costs of starting a business now is extremely high because of rent, acquiring merchandise, getting a licence, or promoting their businesses through any offline advertisement means.

The key concern between the two different groups of entrepreneurs is on raising startup capital, and how to find investors for this, remains one of the largest problems new and existing entrepreneurs face.

If you’ve been trying to get investment for your small business with little to no success, here are 6 steps to convince an angel investor that your startup is one of the best companies to invest in:

See Also: How To Get Seed Funding For Your Small Business In Africa

Step 1: Show How The Business Can Make Profits

Before you start exploring investment options, first test your business idea to prove that it is viable. This will help your small business pitch when you’re trying to find investors for your startup.

Doing this validates your business idea and doesn’t just build your self-confidence, but also builds the confidence of investors in your business.

Step 2: Show How Strong The Demand For Your Products Or Services Are

The next step is to show how much demand there is for your product or service in the marketplace. You should do this by using detailed statistics, showing economic reports, feature popular articles on the subject, and even show the result of a survey you or an organisation carried out.

By proving there’s a vast demand for your products or services, it will be easier for you to find investors and convince them to make an investment in your small business.

Step 3: Outline A Proven Marketing Plan

Outline a marketing plan showing the effectiveness of a strategy that worked when you tested your business idea in step one. Since you haven’t fully scaled your business, your marketing plan would have to be based on what has already worked for you and what currently works for others in your industry.

See Also: How To Market A New Product In Nigeria

Step 4: Highlight Your Strengths

If you have experience in this industry or a similar one, now is the time to highlight your years of experience as one of your strengths, which could help prove you’re well suited to run this business successfully.

Investors want to believe that you’re the best man for the job. They want their investments to be safe because, a long streak of unsuccessful bets has gotten many of them extremely cautious about what to invest in.

By showing that you have a vast experience in the industry you’re trying to start a business in, investors will feel a lot more comfortable entrusting you with their hard-earned money.

Step 5: Show How You’ll Run Your Business Operations

At this point, you should show the prospective investor how you intend to handle the overall business operations.

They’d want to know how you will acquire or manufacture your products, manage distribution links, and also how you intend to retain your customers.

By showing how you’ll run the daily operations profitably after going through the previous four steps, it will be a lot easier for you to secure an investment when you do find investors.

Step 6: Detail Your Budget

Now you show your potential investors a monthly budget on how the business expenditure would run through a period of 12 to 36 months.

They need to know that their investment will not be squandered and can also sustain the business long enough for it to hit its break even point.

Also ensure that your budget doesn’t just show the business expenditures, but also shows how and when your investors will get a good return on their investments.

See Also: 7 Sure Ways To Cut Your Small Business Expenses And Increase Your Profit

What are your thoughts on how to find investors for your small business? Let me know by leaving a comment below.

Image Source: bplans.com