Raising money for a business can be an overwhelming process even when you have the experience, network and a viable business. For a new business owner who lacks the courage that experience provides, the network, or skills necessary to raise the money, it can be even more tasking.
To help make this process of raising money easier, here are five things you should know that can help:
1. Make Your Business Investable – Dear, investors would not just throw money at you because they have it, or because your pitch is stellar, no you have to give them something worth investing. The best way to make your business investable is to ensure you show that your business is growing and convince them that they are missing out if they don’t invest.
2. Choose The Right Kind of Investment for Your Business – Most business owners raising money for the first time fail because they don’t choose the right type of investment for their business type and phase. You hear XYZ startup or business raised a million dollars, and you immediately go after venture capital without taking time to assess what type of investment would be most suitable for your type of business.
3. Get Your Financials Right – Whether you’re pitching to investors or submitting an application to lenders, you just have to show that you know your numbers. How else are you going to prove to investors that you know what you’re doing and help them see the potential you see? Your financial statement must be easy to understand and realistic; you can not be a small company with little or no revenues and be asking for millions of dollars the first time or make some unrealistic projections.
Related Article: How To Determine The Right Loan Amount For Your Business
4. You May Be Rejected – The truth is that even though you do all the right things; your business idea is great, you gave a stellar pitch, you were consistent, your application could still be rejected. And that is okay, you have to realise that investors and lenders are approached by numerous businesses and startups every day and sometimes they miss out on great deals. But what do you do when your loan or investment request has been rejected? You can choose to find other alternatives to funding your business.
5. Get Help – Don’t be afraid to ask questions to get professional help when you can. Help from another business owner, coach, investment expert or startup founder that has gone through the fundraising process can be instrumental to the success of your own business. Getting all the help you need can often be the difference between a successful fundraising and a failed attempt.