This article will be helpful to those who are starting a business and wondering where and how to look for funds. This is relevant for businesses that require significant investment with great potential for success. How do you find business investors for your company?
In short, everywhere. There are either people who can become investors or those who know potential investors. They can also become your customers, suppliers, or a gateway to more introductions. Talk up your venture and don’t be afraid to ask for help, an investment, or an introduction to potential investors.
Your Relatives and Close Friends
The first place to look is your relatives and close friends. These are people that know you well and you need to sell the project to them in the same way as an ordinary investor. There should be total preparation, presentation, and at the conclusion, offer them a contract (close the sale). Don’t expect them to invest their money just because they know you well, but it helps. Relatives and close friends are an option that cannot be ruled out.
Friends on Social Networks
There you definitely have hundreds or thousands of contacts through your social media networks. You don’t need to ask them for money. Call and write to them to consult. If you believe in the project, you should not be afraid to use online marketing to offer your friend a profitable business to make money.
There are many top managers in America and Europe. Among them, some receive a salary of more than 300-500 thousand dollars a month. Each of them wants to create a safety cushion for themselves in the form of passive income. Where can I find these people? On social networks Instagram, Facebook. You need to write to everyone you find. Offer to call or meet to tell you more about the project. It’s essential to write a good message. Keep your letter short and concise.
Among the owners of small and medium-sized businesses, some are looking for new directions. Are they already bored with their business, or they like to open new projects and experiment? They too can be found on social networks. You can come to their office – by signing up through a secretary, or without warning. Turn on your imagination.
Here we mean people who are purposefully looking for businesses to invest money in. They can also be found on social networks, or you can visit various angel investment events, investment clubs, business angel communities, or small investment funds. You can post ads on various sites to find investors. Don’t be afraid to take the first step towards growth and new opportunities! It is all a part of building a successful business from scratch.
Bootstrapping your startup through crowdfunding platforms is different. They do not become investors and do not get a share in the business. Using crowdfunding, people throw off small amounts of money on a project. You are simply offering them free goods or services in return.
Raising Money for Your Business
There are two obvious financial strategies to raise money, these are bank loans (debt) and investors (equity). Loans are cheaper since you practically do not feel overpayment in comparison with the investor’s share. In addition, you will close the loan after some time. The investor must tell you right away that if this is your first business, then it is better to open it either with your own funds or with a franchise.
Opening a Franchise Business
When you start a franchise business, the risks are disproportionately lower. Unless, of course, it’s a good franchise that can give you everything you need. It’s okay to start a franchise business with borrowed funds. This is how a vast number of projects are launched.
What Interests Investors?
As for the investor, you will always be obliged to pay them a share. On the other hand, you are not obligated to return the investment to them. You only agree on a percentage of the profit and they will want to know exactly how you plan to make them money.
A business consists of product, sales, and management. For the investor’s risks to be minimized, you must understand all about the business you are launching and be prepared to explain that to your investors. First, understand better how to manufacture your product profitably and how to attract potential customers in the required volume for a specific budget so that it is cost-effective. Then learn how to convert those potential customers into buyers and how to run this business. This will be your business plan for a startup explaining how you plan to make money for your investors.
Often, people who know how to make a product make the mistake of quitting their jobs, borrowing money, and starting a business without really understanding the details of required in attracting customers. It often ends sadly. According to statistics, no more than 10% of running businesses survive. And surviving does not mean that they earn the money that the owners expected at the start. The reason is that not everyone understands all four components of a particular business: product production, customer attraction, customer conversion, and profitable management.
Investors are everywhere, if you know where to look for them. You have to consider everyone as a potential investor from relatives and close friends to angel investors and even top managers of companies. You can leave no stone unturned when finding for investors for your business.
Author Bio: Jane Travis graduated from the University with a degree in International Relations. She received her secondary education in literature and composition. She now works part-time as a general manager in a prominent travel company and also writes exciting articles for professional writing services on the topic of management, personnel management, business, and website promotion at her leisure.