Is Your Business Fundable? 6 Ways To Improve Your Chances Of Funding
For entrepreneurs and small business owners, one of the greatest challenges is obtaining funding from investors in order to successfully launch the business. It’s understandable for investors to hesitate since they need to assess whether or not your business is worth funding. Fortunately, Aaron Chong from Ace Capital, a Melbourne mortgage broker firm, has six tips to help increase your chances of convincing your investors.
Here’s how to ensure your business is fundable:
- As an entrepreneur, you need to establish your credibility.
Whatever your product or service, investors will be more willing to consider it if you have earned their trust. Build a resume that displays your skills and qualifications to persuade investors that you are capable of running the business well. Showcase your achievements and use your past experiences and the projects you were involved in to highlight your proficiency.
- The more unique your product is the better.
If your chosen product or service stands out from others in the market in some way, you are more likely to catch the interest of investors and consumers. You may also offer a product that is already established in the industry but you will need to capitalize on what your edge is over other similar offerings.
- Your business model should show a valid return of investment.
The product or service must generate for the investors a return of investment appropriate to the amount they invested. It’s essential that you take into account any influencing factors so you can correctly calculate the return of investment and how long it will take. The length of time is vital since a large ROI won’t be very attractive if it takes many years.
- Show how you can stand out from your competitors.
No matter how unique your product is, never assume that you don’t have any competition. Know what kind of competition you’re up against as well as predict any possible or future competitors. Prepare your strategies for staying at par if not on top of your rivals including how you plan to market your product.
- Explain the risk involved and how to minimize or counter it.
Be upfront with your investors on what kind of risks you and they will be facing, what the chances are of those risks materializing and how much of a threat they will be. Then illustrate how you’re going to manage those risks and your backup plans for any possible adversities.
- Build a strong management team.
Be selective in choosing the people who will lead your staff and help manage your business. Any excellent ideas will not work if the people involved are not skilled. They need to have expertise or at least experience in the industry. If not, they should have talents and accomplishments that will be useful to your new business.
Follow these tips and you’ll fare better when you face your investors. These strategies will help you prepare your business plan so you can satisfactorily answer all of your investor’s questions and entice them to join you.