You’ll need to know how to present your business idea to investors if you want to raise money for a start-up. For this purpose, get in touch with ogscapital.com/business-plan/business-plan-for-investors/
Every business owner must be able to pitch, whether to potential consumers or to investors and banks to raise funds for their new venture. Pitching may appear to require a bright, new company idea with the potential to make millions in the first year, according to shows like the BBC’s Dragon’s Den, but the reality is much different.
When it comes to investing in new enterprises, serious business investors are looking for realistic business strategies and ideas. If you have a great company idea, make sure you have a killer pitch to go with it. This will help you raise money for your start-up. Here are some pointers on how to pitch your business idea to potential investors.
1. Make a short elevator pitch
Ensure you can easily summarise your company idea. Assume you only have 30 seconds to describe your company, then summarise what it does, why it exists, and what makes it distinctive. If business investors are unable to grasp your business concept, they will have little faith in your customers. Spend 30 seconds practicing communicating your idea.
You can then elaborate on the why what, and how of your business idea if asked.
2. Demonstrate your small business idea experience.
When selling your business idea, real-world expertise combined with a skilled management team is likely to inspire investor trust. Two crucial confidence-building features should be used to back up all aspects of your idea:
Business evidence — demonstrate cash flow, a track record with clients, testimonials, and any market research you’ve conducted. Investors are more likely to invest in a company that has demonstrated its trading competence.
Demonstrate your experience – show that your company is in good hands, with a management team that understands the market and has run or worked in similar organizations. Accounting, marketing, sales, and operations skills are vital to include on your CV or the CV of your team if you have one.
3. Demonstrate the ability to make accurate predictions.
Don’t advertise your business as a get-rich-quick program. Sensible investors will be skeptical of your ability to meet multi-million-pound revenue and profit projections. Instead, show realistic revenue growth and give three scenarios in terms of revenue: worst case, medium or projected case, and best case.
Make sure you back up your estimates with facts, such as market data and competitive analyses, and that you explain the assumptions you used to arrive at your revenue forecasts.
4. Before you run, crawl:
Showing that you can deliver on your promises is appealing to potential investors. Show that you can manufacture on a smaller scale or supply your services to a small group of regular consumers before attempting to raise financing for a huge business. Success builds confidence, and if you’ve demonstrated your ability to deliver, you’ll be more likely to acquire finance to develop your company.