Attracting Investors for Small Business

With so many small businesses demanding capital and only a few investors and capital available, it can be difficult to attract investors for your small business.

Many small businesses close shop due to insufficient capital while others suffer from stagnancy.

But in all this, there are a few small businesses that have continued to succeed in attracting and raising the required funds to grow their ventures.

We’ve discovered that these few tips we share below are not just guides but have been critical to the success of many businesses that have been able to attract investors.

1. Know Your Business

You cannot successfully convince others about the potential of your business if you are not sure of it yourself.

Before you think of approaching any investor, you must have extensive knowledge of your business; the strength and weakness, your ideal customer profile and their motivations, your market and trends in your industry, and most importantly your finances.

I say important because many small business owners tend to shy away from their finances as much as possible, but your finance is critical before any investor can decide to invest in your company.

Extensive knowledge of your business is also critical to highlight how investors can come in, the potential yields they can gain by investing and your exit strategy.

2. Research! Research!! Research!!!

You don’t just sit down and hope to get an investor, you take the first step by carrying out research.

This is unfortunately one tip many businesses skip.

You should have an idea of the type of investor you want to attract to your small business.

Google investment firms that are focused on your market, ask other small business owners that have raised capital for more information about the various investors, know the specific metrics that these investors prioritise in a business.

By doing this, you would have sufficient information on the top investors that may be a good fit for your business and how you can reach them.

3. Network Even Before You Need to Raise Capital

The best time to start attracting investors to your small business is way before you need them to invest.

This removes the pressure and desperation that hinders many entrepreneurs from successfully attracting investors.

You see, one of the best ways to attract investors is by leveraging your network- friends of friends and business partners that you have worked with over the years.

Another way is by establishing cold relationships with investors through events.

Either way, it takes some time to attract and court investors before selling them on investing in your small business and which is why we recommend that you start it even before it is necessary.

4. Tell Compelling Stories

Storytelling is a critical tool to attract investors.

Whether it’s the story you share on your about us page or the stories you tell when you pitch, a good story can be the difference between the decision to invest in a small business or not.

A well-crafted story about why you started the business can be the first thing an investor hears about you before they see your financial statements.

So, make sure you have a good story that explains why your business came to be.

Attracting investors takes a lot of time and effort.

Many small businesses fail to attract investors that would have been critical to their growth because of small mistakes.

To avert such errors, we guide small business owners through the process of attracting investors and raising funds successfully.

Sign up for SME Finance today and get all the professional help you need to raise capital to grow and expand your small business.