5 Things You Must Do Before Looking For Investors

Do you have a great business idea you want to start up but don’t have the capital to do it? Starting a business can be expensive, and in most cases, people don’t have the cash they need to get the ball rolling on their business without some outside help. If you plan to seek funding from investors, you might be wondering, “how can I make them interested in investing in my business?”

Here are 5 key components you should focus on before looking for investors.

The ‘BEST’ Idea

Anyone can come up with a business idea, but think about what makes your idea the best? Try thinking of something “new and innovative” because chances are if there are hundreds of the same product; then your company isn’t likely to be a hit if you don’t show why it’s different.

A Rock-Solid Business Plan

With a solid business plan, you’ll not only show investors that you’re serious about your business but that you’ve thought about ways to ensure you make money. Don’t know what your business plan should include? Here are some things you should plan to include:

Target Market – Have data to support your reasoning
Sales Channels – Why will they be effective?
Marketing Plans – Show how it will help you run a successful business
Competitors – You should always know who your competitors are and show how you plan to be better than them
Return Timeline – Show when you project you’ll start making money
Obstacles – List some projected obstacles and solutions

Return On Investment

When can your investors expect to make a profit? This is a pivotal question to answer during your pitch. More than anything, investors want to see a return on their investment, so if you can show that your business is going to make them money, then chances are you’ve already got them hooked!

Set Milestones

It’s always smart to set milestones for your business. Where do you see your business in one year? What about in 5 years? Here are some important questions to ask yourself that investors will want to know:

How many locations will you open?
How many employees will work for you?
How many customers will you have?
How much will your business bring in for revenue?

Execute Your Pitch

Now that you have an awesome idea and business plan, you must be able to execute your pitch. It should be concise but detailed, informative, but persuasive, and most of all, memorable.

Imagine you are in an elevator, and you only have 30 seconds to 2 minutes to explain and convince an investor why your business idea will be successful. It would be best if you practiced until you are comfortable saying your pitch without sounding rehearsed. Let your passion for your business shine!

Investors hear several pitches every day, so if you want to stand out, you need to be better than everyone else you’ve met with.

Remember: