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6 Steps To Get Venture Capitalists To Invest In Your Business Idea

You might have the most amazing business idea, but that is not always enough to convince your investors. Your investors need proof that their investments will not be in vain. You need to be equipped with the right numbers and figures to persuade capitalists. Here are six steps you need to follow in order to get corporate sharks to invest in your small business.

Step 1: Emphasize on the profit potential of your business
Profit is king! Capitalist will focus primarily on the bottom line. For them to get a return on their investment, your business needs to make a profit.
The best way to prove that your business idea is practical is to test it in the real market. Work with actual customers and assess the amount they are willing to pay for your product.  This gives you actual numbers and figures to work with. Take these numbers to estimate futures sales and costs to show that, at the end of the day, your business will make a profit.

Step 2: Show that there is significant and growing demand for your product or service.
Your business will only be profitable if consumers are willing to buy your product. Investors need to be assured that there is a considerable and expanding demand for your brand. You need to be offering something different to your customers. Something they cannot buy from your rivals. A product with a special USP.

Use statistics to entice the corporate sharks to invest in your small business. Census reports, economic reports, sales reports of other similar business, product trial reports, feedback from consumers, and other relevant articles that verify that your product will be the next talk of the town.

Step 3: Present your marketing plan

A marketing plan is crucial to attract finance for your small business. Your investors will want to know how you plan on making your product famous.
Which method of promotion will you use to reach your potential customers? How will you convince them to choose your product over competitors’ products? How frequently will the consumer be reminded of your product? Capitalists will always seek answers to these questions. Make sure you have a solid marketing plan, backed up with numerical data to respond to any queries your investors might have.

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Step 4: Define your strength.

Why should corporate sharks invest in your small business? What makes you different from others? You need to specify your strengths. Whether they are your bold entrepreneurial characteristics or years of experience in the industry. Add anything to this list that will convince the corporate sharks that you will be successful. This could include educational background, creative traits, as well as personal achievements that indicate that you have the determination, intelligence, and passion to drive your business towards success.

Step 5: Illustrate how the business will function.
Describe your business functions to your investors, from the purchase of raw materials to the delivery of the product to the final consumer. Corporate sharks need to see that you have thought it through.

Confirm that you have chosen the most cost effective working methods for your business. Your business functions are precise and can be easily understood and followed by all members of the company. Your organizational structure is bold, simple, and will not delay the decision making process.

Step 6: Declare a budget.

Use the numerical figures you derived and produce a monthly budget for the first three years of your business. Remember to include exactly how and when your investors will be paid.

Convincing a corporate shark to invest in your small business is different from convincing the bank to approve your loan. You need to be practical and creative with these investors.  Large numbers and a lengthy business plans may not be enough.
Take them out into the market and show them that similar businesses are thriving. Let them realize that your product is what consumers want. They need to trust your potential and believe that you will do better than your competitors.

Convincing a corporate shark to invest in your small business may be a time consuming process, but it is definitely worth it. Especially considering the other sources of funding, which may cost you more and exert greater pressure.

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