Finding the funds required to launch a business is almost a business in and of itself. There are several angel investment firms with the sole responsibility of finding new talent to invest in. Acquiring funding requires planning and careful execution to create an idea others will believe in.
Writing Your Business Plan
Every viable business needs a business plan that describes the type of company you want to create, including mission statement and executive board. Begin with a high-level pitch that outlines what your company hopes to accomplish, and how your product or service will help your customer base. Think of the initial summary like a headline, or like the objective on a resume. It’s a one-sentence discussion of what you plan to accomplish.
You may also want to present projections on where you plan for your company to be within five to ten years. Back these estimates up with market data that shows there is a need for what you’re selling, who is most likely to buy your product or service, and perhaps some ideas for additional revenue in the form of upselling. This helps give an investor the idea that you have a solid business with a defined direction, and that you have concrete plans to sell a product your customers will need.
Market Research
Market research will tell you how much money is invested in your industry, and give you some idea of where that money is going. Draw upon publicly available data to do most of your Competitive research, like advertising dollars spent or any surveys with data about your target market. It’s also a good idea to start to define that customer base, with age or income level as part of that description. Try to form the most accurate picture of your ideal customer as possible.
An investor who comes into fund your company can help you hit these goals, but you should be willing to listen. Remember that money is only part of the equation. A good investor will provide years of experience that will help you.
Finding Investors
The Web is a good place to find small business financing, but it’s not the only one. Online investment communities are good spots to talk business, drawing advice from those already in the know. You can also check your local chamber of commerce, or ask friends and family for advice.
Getting funding from a bank usually requires a good credit score and a very solid business plan. This source of funding sounds stable, but it can be unreliable for the long term. For one, a bank gives you a variable rate based on your credit rating, and the loan may not be large enough to cover your expenses.
Pitching to Investors
The company pitch is crucial if you plan to actually meet with investors. They are busy people, so you need to find a way to explain the business to them succinctly. You may have time to present, in which case you should limit yourself to all but the most essential information in a slide show. The would-be investors will read your detailed arguments later, you need to focus on selling the sizzle.
Time your pitch to try and cut it down as much as possible. Fifteen minutes is a decent amount of time for your presentation, but even shorter is better. If you use slides, include only the most essential information on there, and do not ever read from your slides.
The final piece of advice is to get over your stage fright. Everyone who owns a business considers pitching to investors, so you’ll have years of experience to draw from if you continue to seek advice on the Web or from peers.
About the Author: This article is written by Tara Miller