How to find investors for your small business
Many small business owners find the challenge of obtaining enough working capital to keep their small business up and running, a constant task. This leads to many small business owners turning to investors, to help them fund the continued development and growth of their small business. Successful small business owners find that they must devote a portion of their time, on regular basis, to finding the money they need, if they want to be able to keep their small business running, for the long term. If you decide to turn to equity financing (using investors) to fund your small business, it is crucial to understand what you will need. Here is what you need to know about how to find investors for your small business-
- A business plan is everything-Any potential investor will want to see that you have taken the time and made the effort to develop a plan, for your business. This plan should clearly spell out how you will take your small business and grow it into something much larger. Investors are looking for a solid return on their money, so your business plan, must be able to attract them. The key to writing a business plant that will attract investors is to do the research that you need to, before you even beginning writing. If you ignore sections of your business, or just make up numbers, without documentation, your potential investor will see this and take your business out of consideration. Finally, it is important to keep in mind that you will not only need to be able to show what you will do with the money, but also how you will provide the return on their investment, that they are looking for.
- A marketing plan is also crucial-Any successful investor knows that marketing is the lifeblood of any company. You must be able to show with your marketing plan that you know where your target market is and how to reach them. Your marketing plan should be well developed and show multiple avenues for both marketing your products or services, and selling them. You will have little chance of attracting potential investors, if you have not developed a marketing plan. Coupled with your marketing plan, you will need to show how the sales function of your company works. The sales arm of your small business must be able to get the products or services you offer, to your customers. In addition, you must be able to show that you have long term growth in the market place that justifies that type of marketing and sales infrastructure that you have set up.
- A market potential must be evident-Investors are looking for small businesses that can provide them a positive return on their investment over time. This means that you have to show potential investors, that there is a place in the market, for your products and services, and that this need will remain over time. Most serious investors will not put money into a fad or trend company that is unlikely to remain in business, for an extended period of time. The bottom line is that you are unlikely to get any investment money, if you cannot show a long term market potential.
- A management structure that make the small business a success-Savvy investors know that they are really investing in the people that run small businesses, rather then the products or services. If you cannot engender a feeling of trust in the experience and expertise of your management, then it is more then likely that potential investors will pass your small business by. You want to clearly show that everyone who is in a management position has the experience and skills to take your small business and grow it into a success.