In Need of Funding? How Your Business Plan Can Have a Positive Impact on Investors

Date posted: October 13, 2017

By Harper Harmon

So you have a big idea for your business that you want to see make millions in revenue and bring to life both in terms of offering services and building the infrastructure and headquarters to make it happen. Except you have a small problem; you don’t have the capital to do it with. This is why you need to approach lenders, venture capitalists or partner investors to raise the capital you need and do it the right way. There are other politics that go into your approach to investors that cover details such as how much of an ownership stake they’ll get in the company, but for now the main idea is to make them want to invest in your company.

Developing Your Plan

The first step you’ll need to sell investors on your business is to have a business plan construed and written into something you know is realistic. To be clear, the business plan is not your business pitch, which is what you use to grab investors’ attention in the short run before really getting into the major details. But your business plan explains in more detail how your company works, how you expect it to grow, what its leadership and management structure will look like, what your marketing plan is and what its financial management will look like. More likely than not, the investors you target will want to see this first, but if they like it then comes your pitch.

Making A Good Pitch

There are different kinds of pitches you might present to investors or loan officers, and most times you get an opportunity to do so it will be a formal pitch that usually includes a slide presentation and in some cases flyers or tangible products. But sometimes you might run into these investors in an informal setting such as an elevator or taxicab and give them an elevator pitch. What’s important is that all pitches you make have attention grabbing details and really actually show these investors why investing in your company will be a great decision for them. It’s important to really practice these pitches, not necessarily as simply a robotic memorized line, but in a way that that shows enthusiasm and confidence to investors. But it’s most important to make sure you know your business in and out and are prepared to answer all questions.

Exit Strategy For Your Business

Part of your business plan and a question that will likely come up at some point is “what is your business exit strategy?” This is a plan for what you will do in the case of both business success and failure. It might be your plan to sell the business or transfer ownership once it’s reached a certain amount in profits, or it might be how you plan to close up shop if things don’t work out the way you planned. The exit strategy is a very important detail your investors will need to know so that they know their money won’t be at high risk when investing in your business.

Connecting And Finding Investors

You’ve probably heard the old saying about “it’s not what you know but who you know” many times, and in the case of investors that is very much the same. You may find it easier to bring your plan to light in front of investors that you have somewhat of a connection to already, such as people your college professor knows or people a friend might introduce you to at a networking event. Having someone who can vouch for your experience, innovation and people skills is likely to garner more attention to investors rather than just approaching them as a total stranger in the office. Either way, your relationship to these investors is going to become important especially if you strike a deal for funding your business with them.

Harper Harmon I am a freelance writer and blogger who focuses on business, health and other various topics. I  graduated with a bachelor’s degree in communication from UCLA and currently reside in Santa Cruz with my dog, Sassy.

 

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