When starting a new business or growing your business, most entrepreneurs need to attract investment. Whether this is from banks, crowd funding, an investor or Joint Venture (JV) partner, you need to present your business or opportunity in the best possible light in order to secure the finance you require. The following are a few tips to help you attract investment for your business or opportunity.
“There are no secrets to success, it is the result of hard work, preparation and learning from failure” – Colin Powel
Tip 1: Business Plan
A detailed business plan will be required from your potential investor that details exactly what the investment will be spent on. This may be your business plan for your entire business or for a specific project depending on the investment you are looking for, business growth or project specific. These plans should be studied with an analytical perspective of a potential investor so you can pre-empt and address any questions you feel they may have.
Tip 2: Know Your Value
If you are looking for investment for your business you need to know the value of your business and the projected value of your business, not forgetting to include the value of intellectual property – for example brands, inventions and knowledge. If you are looking for investment for a specific project and therefore the investor is investing in you, you should still value yourself and the skills and knowledge you bring to the opportunity, along with the projected value of the project, the return they will be getting and the exit strategy (preferably more than one to prove the security of their investment).
Tip 3: Know Your Offer
Now you have your plan and have valued yourself and your business you need to define exactly what you are offering to investors and what you would not accept. Decide beforehand whether you want to pay a straight interest return on the investment or whether you want to form a partnership. Interest returns need to be affordable for your business (ensuring your business/opportunity remains profitable) and attractive to the investor. Where possible, do not offer a stake in your business in return for investment as this could stop you running your business how you want to due to shareholders rights and interests. But in the case of JV partnerships, if the investor will bring benefit to the opportunity then a share of the business/opportunity should be considered.
Attracting investment can be an important part of your business’ growth, so stringent planning of must be done before presenting the opportunity to potential investors. Additionally early networking to build relationships with potential investors before you have your investment opportunity will help you succeed.
We hope you have found these tips useful and are able to use them to improve your business and investments. Don’t miss out on future tips - subscribe to Turner Invest newsletter on turnerinvest.co.uk and follow us on social media.
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Turner Invest Directors Catherine & Stephen Turner