Are you ready to grow your business to the next level by bringing on investors? If so, you'll have to prepare to present your business in the best possible light, particularly emphasizing what investors look for in potential partnerships. Here are five of the most important things to focus on when attracting investors.
1. Financial Information and Projections
Investors won't be interested in your business if you can't show them proof of responsible current financial performance, plus realistic and profitable financial projections. Clear financial management and budgets, financial stability, financial growth signs, clear debt repayment plans and return on investment (ROI) are what investors look for when considering business investments.
2. Industry Experience
Investors want to know you and your key employees, including executives and managers, have solid experience and expertise. Prepare to explain your team's track record and work experience as it pertains to your business and your industry. Expect that investors will independently research all of this, as well.
3. Unique Product or Service
For your business to prove profitable for an investor, it needs to stand out in the marketplace, so uniqueness is another important feature of what investors look for when making decisions. Smart investors want to see that your offering stands out from the crowd enough to compete, profit and make their investment worthwhile. Present solid evidence of uniqueness. This could be through a patent, exclusive license and even statistics, research or studies showing little or no competition for the products or services you offer.
4. Market Potential and Knowledge
Even if you believe you have a unique business, investors won't be interested if no one wants to buy what you're offering. Present key data on your target market and show you have a detailed profile of your ideal customer in place. Investors want you to know your target market thoroughly and demonstrate confidence that there is a large enough need for your products and services to make your business profitable.
5. Your Knowledge of Your Competition
It's vital to know exactly who your competitors are and how your business compares. The more you know about how each of your competitors operates and whether they present a threat or opportunity — or both — the more likely you'll be to impress potential investors. If you're in a crowded market with many strong competitors, your company's unique differentiators are even more important.
When presenting your business to potential investors, put yourself in their shoes. What would you want to know if you were going to invest in someone else's business? Plan carefully, prepare for the hard questions and demonstrate what you know to boost your investment potential.
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