After being in the business for some time, an entrepreneur may feel the need to expand the business. Although some entrepreneurs are lucky enough to have enough resources for expansion, others need investors to expand their business. Expansion may mean having to make the current shop bigger or setting up branches in other locations.
I have witnessed how many businesses became successful—starting from owning several branches to stepping into franchising. If your business becomes a popular brand and you want to have another branch, you can take a loan or encourage others to invest in your business so that your brand grows even more.
I previously discussed how an entrepreneur should choose the right investor for his business. After choosing the right candidate, your next job is to convince him/her to invest in your business. Here are a few tips.
1. Approach your prospective investor with substantial facts about your business. Mention how long the business has been, the nature of the business, and what investment is needed. It will also be helpful to show how your business has progressed and what you have already achieved. Present a business plan that will show achievable goals and practical steps on how he/she can reach them.
2. Perform market research so that you may prove to your prospective investor that your idea can actually solve a problem and that there is an existing market for it.
3. Be prepared about what your prospective investor may offer you. An angel investor may become a mentor or consultant, and his connections can help your company. On the other hand, a venture capitalist may want to have a seat among the board of directors in return for their investment.
4. Show your passion for your business. Your prospective investor should know that you are 100 percent committed to your business.
5. Know your business completely. Be prepared to answer all the questions that your prospective investor will ask you. If you have seen the show “Shark Tank”, you will be surprised at how some questions thrown by the “Sharks” to the entrepreneurs were so simple and yet some entrepreneurs were left speechless.
Maybe they were nervous, but an entrepreneur needs to be confident. Never face a prospective investor without knowing the ins and outs of your business. Be careful with the figures that you mention. Be within reasonable parameters. You should be able to back up your cause if your prospective investor questions your intent to seek financial support.
6. Your prospective investors may decline your offer. This means you may not have properly informed them about your business, or you may need to tweak your business plan. Go through all the negative comments and try to come up with a much better business plan for your next prospective investor.
These tips can help you win an investor who can aid you with both finances and management.
If you truly believe in what you do, never step back and walk away. Lay out better strategies that can convince your next prospective investor. Ensure that you can answer all questions honestly and efficiently. Be confident and true.
For more information, you may contact Armando "Butz" Bartolome
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