Enticing investors made easy
June 13, 2012
When just starting out, it is not uncommon for small businesses to struggle financially. From not being able to hire many workers because payroll is an issue to not being able to embark on a large-scale marketing campaign, money is often an issue for start-ups.
Small business owners may be able to remedy the situation by finding investors who have faith in the company's mission. Investors can often make a big difference on the bottom line of financial management software. While it may be daunting to approach others asking for money, there are a few easy steps leaders can take to drive economic opportunities.
Approach different types of people
The Houston Chronicle reported there are many different types of individuals and groups that may be interested in financing a small business until they get on their feet and the investment pays off. The source noted banks and venture capitalists are often common sources for money. The two groups, however, usually require some sort of stability on the part of the start-up, and venture capitalists often ask for a managerial or decision-making role.
Individuals can often be approached by an owner to garner investments. Entrepreneur Magazine claimed friends and family can often be lucrative investors. The source noted it is important to remain business-like when discussing the company with acquaintances who are potential investors. In this situation, always keep information and work out a repayment plan upfront, if necessary.
The Houston Chronicle explained others can be approached for money as well, such as peers in the industry and angel investors, or those who are often independently wealthy.
Have a plan
It is important to always have goals for the business, but that becomes especially pertinent when trying to convince possible investors to give money to the firm. The more confident they are in the success of the company, the more likely they may be to invest.
A separate Entrepreneur article explained the easiest way to accomplish this is to plan the pitch beforehand. The source said to consider the audience and discover the simplest way to describe the intentions of the business, such as using pictures of products and detailing how the goods can be used to potential investors.
Consider using the
Some leaders may think they have to speak to acquaintances and other peers they already know. However, Bankrate.com reported the internet can be an invaluable tool when searching for investors. There are various websites that were created to match individuals or funding companies looking to make an investment in small companies that need money.
Bankrate reported most loans that come from matches made on the internet are between $100,000 and $1 million.