Being in the business after quite some time, an entrepreneur may feel that it is time to expand the business. Although some entrepreneurs are lucky enough to have enough resources for the expansion, others would consider having investors grow their business. A company’s growth may mean having to make the current store/shop bigger or branching out to other locations.
I have witnessed so many businesses that have indeed become successful. After all these years, from owning several branches to stepping into franchising. Let’s say your business really becomes a famous brand. You would like to create another component where you think the location would be perfect. However, you may not have sufficient resources to make that move. You have the option to take a loan or encourage some people to invest in your business for your brand to grow even more.
I have discussed how an entrepreneur should choose the right investor for his business from my other article. Now, you may have listed down all your prospective investors. But you should also narrow it down to just a few people. The people you choose may be the best candidate, but how sure are they willing to invest in your business? You can’t just ask the person for help without giving him something to support you. You should do a few things to easily convince your prospective investor.
- Approach your prospective investor with substantial facts about your business. Mention how long the company has been, the nature of business, and what investment is needed. It will also be helpful to include how your business has progressed. And what you have already achieved in your presentation. Present a business plan that will show achievable goals and practical steps to reach them.
- Perform market research so that you may prove to your prospective investor that your idea can actually solve a problem and that there is an existing market for it.
- Be prepared for how your prospective investor would offer you. An angel investor may become a mentor or consultant, wherein his connections can help your company. On the other hand, a venture capitalist may want to have a seat among the board of directors in return for their investment.
- Show your passion for your business. Your prospective investor should be able to know that you are 100% committed to your business. An investor would only want to be involved if they know that they will not waste their money and time. Therefore, ensure that you genuinely want to pursue the business and that it is not only what you feel at the moment.
- You must know your business altogether. Be prepared to answer all the questions your prospect investor will ask you. If you have seen the show “Shark Tank,” you will be surprised at how some questions thrown by the “Sharks” to the entrepreneurs can be so simple, yet some entrepreneurs are just left speechless. Now, it can be because they are nervous, but that is one thing that an entrepreneur should learn when in front of people – to be confident and to be able to think fast. Never face a prospective investor without knowing the ins and outs of your business. Be careful with the figures that you mention. Be within reasonable parameters. Be able to back up your cause if your prospect investor questions your intent to seek financial support.
- The prospect investors you went up to may decline you. If this happens, it means that you may have missed informing them more about your business, or you may need a little more tweaking with your business plan. Whatever response they may have provided you, take them in. Go through all the negative comments and pursue to make improvements. Doing so will help you develop a much better business plan for your next prospective investor.
These tips can help you win an investor who can be your aid in financial support and consulting and share valuable insights that can benefit your business.
If you genuinely believe in what you do, never step back and walk away. Instead, give it some more time to think about how you can make things better. Layout better strategies that can easily convince your next prospective investor to invest. But, be sure that you can answer all questions as honestly and as efficiently as you can next time. Be confident and accurate.
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You may contact Armando “Butz” Bartolome for questions and more information.
By email: aob@gmb.ph
FB Page: Armando Bartolome
Linkedin: https://www.linkedin.com/in/franguru/
Website: https://www.gmb.ph
