Finding investors is one of the biggest challenges of starting and running a business. Generally, it’s best to start small and move toward more significant funding options later.
Before you seek a business investor, start operations on a small scale. Part one of this series, CPR, recommended some tips to get your business in order. Today's post serves as a continuation, providing additional recommendations.
The goal is to ensure you understand your business. If you are uncomfortable handling business meetings of such magnitude, don't commit business sabotage; hire a business consultant to facilitate. Let's consider additional recommendations:
1. Business Model within your Business PlansÂ
Your business plan should clearly outline your business model and revenue generation strategy. Investors want to understand how your business will make money and sustain profitability.
2. Exit Strategy
Another element that should be in your business plan is a business exit strategy. An exit strategy is not necessarily the way to end a business, which is most commonly viewed. Rather, it is a plan that moves a business toward long-term goals and allows a smooth transition to a new phase, whether that involves re-imagining business direction or leadership, keeping financially sustainable, or pivoting for challenges. Your business plan needs to explain how investors will eventually see a return on their investment (ROI) through acquisition, an IPO, or another means.
3. Business Plan Financial Projections
Ensure your business plan has an addendum reflecting your financial projections. Your financial projections should be well-researched. Investors want to see that your business has a clear path to profitability and a solid financial plan.
4. Use of Funds
Clearly outline how you intend to use the investment funds. Investors want to know that their money will be used wisely to drive the business forward.
Business partners who are potential investors are an excellent way to level up. You must consider your goals, weigh your options, and be ready to negotiate. Remember, leveling up is about creating a win-win to secure funding opportunities.
Warm Regards,
CeeCee