It is often challenging for entrepreneurs to find investors, and even more difficult to convince them to actually put money in your business. However, finding the right investors can make a world of difference in the success of your business. Read on for some tips on finding and keeping investors for your small business.
1. Start with Your Own Community
Start within an immediate network—your local community. Meet other entrepreneurs who may have connections to potential investors. A strong referral from a respected business owner will up your chances of having an investor invest in your small business. Keep in mind that most investors tend to be retired entrepreneurs whose knowledge and experience can help you improve your business.
2. Have a Great Pitch
Practice your “elevator pitch.” You never know when you might meet someone who is interested in your small business and wants to invest in its growth. Always have a 30-second pitch that will not only explain your company’s purpose, but also convince others that investing in the company is a good idea. You should not directly ask for money; instead, persuade investors that investing in your business will benefit them by showing them how great and profitable your business is.
3. Show Investors Your Business Plan
A key step in proving that your business is a worthy investment is proving that your business plan is strong. The plan should include information about your business’s finances, research about market trends, and strategies for success. Most importantly, talk up your business’s profitability (but make sure to stay honest!), and explain how your business achieves profit and how that money will result in a return on the investment.
If you cannot find equity investors, debt financing is an option that works for countless entrepreneurs. Although getting a bank or non-bank lender to make a loan is far from a cakewalk, it is easier than it was a few years ago. Better yet, interest rates are at historic lows. Companies such as Biz2Credit.com can help you get the best deal.