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How To Make Your Business More Attractive For Funding

If you are seeking investment, there are ways to set your startup apart from the sea of competitors, and make your business stand out from the crowd. Here are some key ways to prepare your business to make it more attractive to potential investors.

A strong business plan 

Investors will only take your company seriously if you can demonstrate a strong business plan. A thorough business plan will know your business inside out: what solution your business is offering, who the target market is, what price you are selling your products/services at, how much you expect to spend, your forecasted revenues for the first couple of years and when you expect to break even. 

A good business plan will also show that you have thought through potential obstacles and how you plan to overcome them.

As part of this, you need to be prepared to present your forecasts in depth. This should realistically consider your market size and opportunities for growth. Note that your model should be realistic but also, in order to attract attention from investors, appealing. That means demonstrating growth and revenue that would be interesting to investors, making sure to justify how you plan to reach those figures.

Present past business transactions

Any potential investors will want to see records of past transactions to understand the demand for your business and services. If you want to go the extra mile, you could also organise for them to see customer references or interviews to see how your customers experience your product or service first-hand. This can demonstrate to investors the value that your company can offer to your customers and how you might set yourself apart from market competitors.

Be transparent about your finances

“When approaching potential investors, be prepared to explain your company’s financial statements,” explains Richard Allan of Capital Bean.

“Investors will want to know about your existing debt, your cash flow and spending and your equity. If you have good cash flow, it shows that you are able to manage company finances well and that you are prepared for emergencies.”

Know what you will use the money for

“It’s all well and good wanting to appeal to investors but if you are injecting money into the company, you need to be sure of what the money will be used for,” he continues.

“Investors will also want to know what their money will be spent on.”

“When you have a startup, there are multiple expenses; however, it may be more worthwhile waiting until a particular stage of your company’s growth or development before seeking funds.” 

“Capital can help you achieve key milestones such as research and development or growing your team. Investors will also be interested in how efficient you are with your finances.” 

“That is, you should be prepared to demonstrate to investors how you intend to grow your business or reach the next milestone using the least amount of their invested cash as possible.”

Assure investors that their money is in good hands

Investors will want to know about who is managing your company – not just you as the CEO but the wider team. They will be interested to know the experience that your team can bring to the table and their skill set. 

At this stage, it is worth collating track records of your team members regarding leadership, financial efficiency, and specialist achievements in your industry or in their role. They look for excellent decision-making skills, examples of when you have been able to act well under pressure and how you have overcome obstacles in the past.