If you have savings that you can put into launching your business or growing your small business, always do that first. Later on, if an opportunity to raise funds arises, you’ll impress potential investors by showing you were committed enough to the idea from the start to put your own money into it.
If you want investors to take you seriously or even give your business a second glance, you will need to make sure you have some kind of growth plan in place to demonstrate a realistic outlook for expansion. This will give them confidence in your idea and reassure them that you’re serious about your plans and that you believe in your business.
Often, investors will co-invest with other notable investors. This will sometimes mean that you are successful in raising more money and end up with a wider pool of expert knowledge to dip into.
Make sure you have a solid team of people that potential investors can tell have the drive and personality to propel your business forward. Be choosy with your selection process and it will pay off.
A bit of background research will show you whether or not a potential investor has experience backing companies similar to yours. Make sure you only approach people who have a good track record when it comes to helping businesses that are comparable to yours in some way. They offer more than just money and their experience and knowledge will be very valuable if you choose right. If they’ve backed similar companies in the past, the chances of them considering investing in your brand increase.
Investors will want to see a return in the not too distant future after offering funding, so make sure you are fairly flexible with the level of control you give to them in terms of the decision making process (but be sure to retain enough control that you still have a say in things). If they see that they will be able to easily guide your business to success without too much red tape, they may be more likely to invest.
The Seed Enterprise Investment Scheme (SEIS) offers 50% tax relief. If you head to the HMRC website and submit the relevant details for their Advance Assurance Application, you should get a response within weeks to say if your business is eligible. If you are, any investors will get a tax break which means you’re an instantly more attractive investment opportunity.
Raising funds is not as easy as deciding you want hundreds of thousands of pounds and getting it overnight. Raising money for your business takes time and patience. It isn’t always going to be a quick process, so stick with it and don’t give up.
If you’re looking to earn investment, you’re going to need to brush up on your pitching skills. Investors want to see confidence, along with a clear and concise plan of where you plan to take your business and how their money could help. Practice makes perfect, so never, ever neglect the preparation stage of seeking investment.
We’ve touched upon the need for patience, but you also need to plan ahead to ensure that funds could be in place when you actually need them. As a general rule, you should start trying to raise funds around nine to 12 months before you actually need the money in place.
If you’ve never attempted to secure investment before, it can be a daunting process. However, plenty of businesses successfully raise funds all the time, so it can be done. There are investors out there just waiting for the next solid investment opportunity, and that could well be your business.