What to do to get your business investor-ready
Improve your chances of getting funding with these 6 techniques
Many entrepreneurs may have great business ideas but find it challenging to get their ideas from paper to reality. Because of this, often entrepreneurs struggle to connect and properly sell their ideas to investors.
According to Gerrie van Biljon, executive director of Business Partners Limited, it's important for entrepreneurs to build up this skill.
"Often entrepreneurs don’t possess the skills to pitch their business effectively and enthusiastically enough to potential investors, and thus don’t succeed in generating the necessary interest or funding," he says.
Master the skill
Van Biljon says that planning, being prepared and using simple pitching techniques will allow entrepreneurs to not only benefit on a personal level, but professionally too.
"Entrepreneurs should also not shy away from asking for referrals"
1. Be prepared and know your story
Van Biljon says that entrepreneurs should be ready and prepared to pitch their ideas at any time and place. He also advises that they should know their business plan, their market and industry like the back of their hand. In addition, Van Biljon says that entrepreneurs must always have a detailed, and updated business plan ready.
"You will immediately be able to send or present your plan if someone wants to have a closer look will help to convince potential investors of your readiness. Besides, knowing that you can back up your pitch with a plan will give you confidence.
"Investors want to know that you are experienced in the industry in which you want them to invest in. Therefore, the more you have worked on your plan, even to the point of taking your idea to the market on a small scale, the better," he adds.
2. Stay on point
According to Van Biljon it is vital that your business plan have a powerful executive summary which summarizes your plan precisely and goes straight to the point.
"Chances are that the investors whom you will be targeting have seen many business plans in their lives, and they will not bother to read further if the executive summary does not whet their appetite," he adds.
3. Stay in touch
Van Biljon says that retaining connections with contacts made is every important. "Once you've made contact with a potential investor, stay in touch, even if it is just by asking for advice, for example on how an investment of the kind you are looking for can best be structured," he says.
4. Plan for the future
Van Biljon says that entrepreneurs should have a plan in place if an investment partnership does not work out. He adds that entrepreneurs can do so by having an exit strategy for the investor in place.
"The investor's thinking is likely to be around whether he or she can make the best return possible on the investment, so this point should be included in the exit plan. The time frames that most investors work with are between three and seven years," he says.