How To Win Over Investors To Invest In Your Business

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Funding a business venture can be difficult. Most people will either take out a loan or get the help of investors. Winning over an investor is ultimately trickier but much more rewarding – you’ll only be paying money back based on your profits, unlike a loan in which you’ll be paying the money back regardless of whether or not your business venture is successful. Almost everyone will get nervous when pitching to investors. Here are some tips to make the process less daunting and ensure that you give the best pitch possible.

Decide how much you need, not what you want

Investors will want to know exactly what you plan to spend their money on in order to make it worth their while. This means only budgeting for what you need, not what you want. If you’re raising money to start a shop, don’t throw in funding for a Christmas party or luxury coffee machine in the staff room. Focus instead on the cost of the deposit, staffing recruitment and important expensive equipment such as tills and software.

Know your figures

An investor won’t feel confident funding someone who doesn’t know their figures. Show your investors that you have budgeted everything by making a note of every individual cost. You don’t have to memorise every cost, but should at least have it all recorded in writing if the need for it arises.

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Choose the right investors

It helps if the person you approach has an interest in your area of trade. You should try to avoid conflicting interests (e.g. approaching the owner of a marketing company with your own marketing company that aims to rival it) and be selective when pitching a niche business idea (e.g. somebody in the fitness trade may be more able to understand the potential of a new fitness gadget).

Get a working prototype

A roughly drawn up plan with no evidence that it works won’t win over anyone. Having some proof that your business model works will encourage investors that it’s not a far-fetched venture. If your business idea is a product, you’ll want to build a working prototype. There are many companies such as these sheet metal fabricators that specialise in the production of prototypes. If you’re hoping to gain investment for a service, similarly test out the service first or even let your investor take part in a free trial.

Collect positive feedback from others

Positive feedback from other people can help to support your cause by showing that there is a demand for your business idea. You can collect feedback through online surveys or through market research sessions with focus groups. Quote any positive feedback at your pitch. You can even use constructive feedback that may support your need to seek investment. For example, if someone has said they like your restaurant but wish it had a delivery service, you could let investors know that their funding could make this happen.

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