How to Secure Investment for Your Business
In last month's blog post, we shared five different funding options for those looking to start-up or grow their business. One of the options we listed was angel investors, the experienced business professionals who provide money to a business in exchange for equity.
To help you plan for your investment application, this month, we’re sharing 7 of our top tips.
1. Research where the money is coming from
Before you start drafting your application, make sure you do your research and find out where the funding is coming from. The best way to do this is to contact the investor either by phone, email or by conducting a thorough Google search!
2. Update your business plan
Your business plan will make the difference between a successful application and a rejected one. It’s therefore key to make sure that it is up-to-date and clearly defines your business, its model, and where you see your business heading in the future. Our business plan template can help you to effectively define your business and objectives and is available to download for free.
3. Perform your own credit check
Most, if not all, investment applications will ask to see your credit score. Luckily, sites like Experian or ClearScore offer free and easy to use credit checks, but be warned: performing too many ‘hard’ credit checks can seriously damage your credit score so only use these sites when necessary. Once you’ve received your credit check, familiarise yourself with it so that you feel confident to answer any questions that may arise during your investment application.
4. Practice your pitch… Then practice it again
A good business pitch will take you far so ensure that your pitch is up to scratch. Investors want to see confidence, as well as a clear plan of where you aim to take your business, and how their investment could help you to achieve those goals. Practice makes perfect so perform your pitch in front of your friends, family, a business advisor, or even your mirror, and seek feedback for improvement. Remember to also enjoy yourself and most importantly to smile!
5. Know what your investors are looking for
You should be aware of what your potential investors are looking to back before starting the application process. Google your investors, find out what projects and businesses they’ve funded previously, and whether it is likely that they’d fund yours.
6. Find out how much money you need and what you will use it for
Applying for investment for your business is an exciting time but don’t forget to take into account the tiny business expenses that are crucial to running a business such as phone bills. Remember to include everything that you will need to run your business. And, if you’re just starting out, seek quotes from at least two providers. For example, if customers will need to contact you by phone, reach out to two telephone providers and see what their monthly rate is.
7. Know how much your business is worth
Finally, and perhaps most importantly, know what your business is worth. The previously mentioned steps will be meaningless to your potential investor if you have little understanding of how much your business is actually worth. A business valuation calculator can give you a very rough estimate.
We’ve supported over 10,000 businesses since starting in 1980 and have seen a lot of investment opportunities succeed. Preparing in advance will give you the best chance at securing the investment you need for your business to start or grow.
If you need any help with your investment application, or in any of the previously mentioned steps, get in touch with one of our experienced business advisors today on 0191 230 6410 or firstname.lastname@example.org. Alternatively, our business advisors are available to talk to online via our online chat service.