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A small business blog featuring tips to help entrepreneurs succeed in the small business world. Topics include family business, human resources, marketing, money, networking, operations, ownership, startup, taxes and technology.
Tips for Gaining and Impressing Potential Investors
It’s not often that a new business can really get itself off the ground without investors to help push it along. But, of course, getting investors to write you a check isn’t all that easy. You obviously believe in the business you want to start because it’s your brain child – a part of you. But convincing others to believe as whole-heartedly as you do can be a rough task.
Here are some tips for getting potential investors to believe in you and the future of your epiphany:
Test the Water
When the idea strikes you for a entrepreneurial venture, feel out potential investors by casually bringing your idea up in conversation. See how they react and what questions they ask. Allow them to express on their own what their position may be, without any implication from you that you’re in need of funds. This will help you to prepare for when you actually do ask for money.
Write it Out
Don’t even think about going to potential investors empty handed, relying on spontaneous intellect. You need to have the makings of a great business plan that you can show them (or at least spout of to them as if you have it written down somewhere), even if it’s still in the works. Investors need to see that you already have your head in the game.
If you simply go to them with an idea, but have done no research on things like the competition, demand, the current market, etc., they aren’t going to see any potential in what you have to offer. If you choose to put something in writing, be sure to make the format appealing and non-overwhelming, such as a small pamphlet or one page summary.
This is a suggestion that may or may not fit your presentation style, but, when presenting your idea, consider letting investors know from the start what the potential risks involved are. In fact, consider starting with the risks involved and then follow that up with all the great possibilities for the future of your startup. You know… “There is some risk involved, such as [fill in risks here], BUT this business could really go somewhere – for example [list a number of plausible positive outcomes here].” Ending on a positive note is always a good thing.
Having a business plan in the works to reveal and being honest about the risks involved help to establish the most important aspect of getting investors to invest in you – trust. They have to be able to trust you – not only that you’re being honest (which is crucial) but that you also know what you’re doing. Trust is really what you’re asking for, their money is simply the presentation of that trust. Remember that.
• Entrepreneur.com: Reel ‘Em In
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An Interesting Way to Win Potential Clients
Common Mistakes – How to Write a Business Plan : Part 7 of 8
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