However, it is not all some mysterious dark art, there are things that you can do to put your business in a better position to secure investment when the opportunity arises.
These days many small business owners think that raising investment finance is like an episode of BBC’s Dragons Den. Whilst there are similarities, the detail and important parts are missed out in the BBC edit. This means that many small business owners fail to grasp the bear essentials.
A key part of this is to play fair. When we say this we refer to what you are prepared to give away to secure the business funding you require.
In essence there are two parts to this;
Financial Benefit – Understand what your investor will want to receive in terms of financial reward. When doing this remember that many investments will not deliver the returns they promise, which is why the investor will want a greater return than you may first think, this is not about greed but about the investor wanting to balance out risk and return.
Overpromise – Many small business owners think that by showing their business in the best possible light will encourage more interest. The reality is that by promising too much in your projections and future business forecasts you will simply encourage doubt in the mind of the business investor.
Pitching your business in the right area, using fair forecasts, acknowledging risk and doubt, and understanding why an investor wants more than you think is fair will all help you get the business investment you want.
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Author Byline – Written by David Farmer