Raising capital for your small business can seem like an impossible task if you’re not familiar with the ins and outs of raising investment, or if you haven’t yet built up relationships with other investors. Yet if you’re trying to get your new business off the ground, there’s no way around it — one day, you’ll need to raise money from outside sources in order to expand your business and grow your profits. The good news? With this guide on raising investment for your small business, even beginners can start their fundraising journey on the right track!
Do Your Research
It’s never too early to start researching the different types of investors and the capital structures that are available. There are a lot of great resources online that can help you find what kind of investor is right for you. Some things to consider before deciding on an investor are how much funding you need, how much equity you’re willing to give up, how long your investment horizon is, and whether or not you want someone else involved in your company.
Create a Solid Business Plan
In order to be successful in raising investment for your small business, you will need a solid business plan. This is often the first step in the process, because investors will want to know exactly what you are trying to do and how you intend on doing it. The more information about your product or service you can provide, the better chance you have of getting someone interested enough to invest in it. If you are not sure where to start with creating this business plan, there are plenty of templates that can help get the ball rolling.
Have a Great Pitch Deck
An important part of the process is creating a great pitch deck. This is a slideshow or presentation which summarizes your business idea and provides investors with an overview of what you’re looking to do. The pitch deck should be well-designed and eye-catching so it’s easy for potential investors to digest quickly, but also contain enough detail that they will feel confident about signing up.
Understand Your Financials
Every small business is different. To help you understand your financials, break down your costs and revenues by month. This will give you a sense of how much money is coming in and going out. Then you can start thinking about what kind of investment package might work best for you. Some people turn to crowdfunding sites like Kickstarter or Indiegogo while others may be more comfortable with family members who have experience investing in businesses or friends who are also entrepreneurs. Whatever path you choose, make sure that the investor is aligned with your goals and values so that they will care about the long-term success of the company just as much as you do.
Find the Right Investor
If you’re thinking about starting your own business, one of the first things you need to do is find investors. Be prepared to make a strong business case and demonstrate that there’s a market opportunity before you approach potential investors. You’ll also need to know what type of funding you want from an investor and how much money you’ll need. Once you’ve done all this, it’s time to start approaching potential investors.
