Indian Stock Market Tips|How to attract investors to your business

Posted by ripples advisory on August 31st, 2018

You’ve got a great business idea, the market is wide open, and you’ve got the time and energy to see it through. You’re confident that you’ll make money, but you still need some capital to get you going. How can you raise this? Unless you have sufficient savings to get you on your feet, there are two options: loans or investment.

Connecting with investors

Networking with other entrepreneurs and business people locally will help you make connections. Attend industry functions, hand out your business card, and get yourself known. If possible, you should invest a substantial amount of your own money in your business before approaching an investor.

Do your research

Find out as much as you can about your potential investor before meeting them. Try to discover what they look for in an investment. You need an investor who is prepared to stick with you for the long haul, rather than one that is looking for a quick profit.

Make a business plan

The main element to attracting an investor is your business plan. Work out your startup costs and your operating costs for at least the first year. Remember to give yourself enough money to live on. If in doubt, overestimate, and then add on a bit more for unforeseen emergencies. This should be balanced against expected profits, but be aware that your business may run at a loss for some time. This doesn’t mean that it won’t be successful eventually, but you will need supportive investment to see you through to that point.

A good business plan will set out its key points in an executive summary. This is what a potential investor will look at first, so it needs to be convincing. Set out your financial forecasts professionally in a spreadsheet showing balance, cash flow, and profit and loss, month by month for at least the first 12 months. If you need to pay a professional accountant or business advisor to help you draw up a convincing business plan, then it will be money well spent.

Figure out how you will brand the business. This includes coming up with a niche, identifying your target audience, and starting to develop your reputation. It is extremely important that your branding strategy helps consumers to relate to your business on a personal level, as no one wants to associate with a faceless corporation. Everything from the logo that you use to the font that is utilized on your website is part of your branding strategy. Keep in mind that although branding often involves trial and error, getting off to a good start is vital to your business’ survival.

Ultimately, look at your business proposition from an investor’s point of view. Imagine the questions you would ask about your business if you were considering investing in it, and come up with credible answers. Be professional but passionate, confident but realistic. Show them that you will do everything it takes to make your business a success.

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