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How do I Attract Small Business Investors?

Article Details
  • Written By: Malcolm Tatum
  • Edited By: Bronwyn Harris
  • Last Modified Date: 29 January 2019
  • Copyright Protected:
    2003-2019
    Conjecture Corporation
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Starting a new business takes a lot of work and a lot of cash. Owners often find that instead of attempting to cover all the start-up and day to day expenses as the business gets established, securing a few small business investors is a smarter move. The trick is to find the right investors, gain their interest, and earn their commitment to your new enterprise. In order to accomplish this, it is important that you provide goods or services that consumers want, a realistic business plan, including long-term and short-term goals, and analysis to back up your projections for success. Without these three essentials, the chance of locating and acquiring small business venture capital is extremely low.

Every viable business begins with a product line that will attract customers. Make sure there is a market for the products you plan on offering. It doesn’t matter whether your small business is online, a brick and mortar operation, or a combination of the two; unless consumers are likely to want what you have to offer, small business investors will not commit their hard-earned cash to your enterprise. Before attempting to acquire small business seed money, compile demographics that demonstrate the potential of your business to compete with others who provide similar products. If it is possible to show how you can fill a gap as well as capture a share in an existing market with those products, that will only strengthen your case.

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Along with selling products that consumers want and need, you must also convince small business investors that your business model is efficient and workable. As part of the business plan, include data regarding the company organization, the production process related to what you will sell, and even how you plan on filling orders from customers. The idea is to demonstrate that the various processes that make up your business model work in harmony and generate as little waste as possible. This is important, since less waste means a better chance of turning a profit sooner rather than later, something small business investors tend to look upon with favor.

It is also essential that you set goals for your small business. Avoid creating overly optimistic short-term and long-term goals in an attempt to impress potential small business investors. Back up your goals with facts and figures that are verifiable and logical. The idea is to attract investors who are willing to give your business time to become established before expecting a return on their investments. Many investors can see right through what is often known as a dog-and-pony show, and will know when you are inflating those figures. Keep it genuine, and the small business investors who find your model and your projections viable will invest in your small business and offer full support as you make those projections come true.

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