BusinessVibesThe vast majorities of business start-ups try to secure some sort of initial funding so that they execute their game plan and survive the crucial first few months whilst the venture gets off the ground.
Too many new business owners suffer from a lack of preparation and direction when it comes to putting together a credible and viable pitch for funding, which is understandable with so many other factors to take up your time, but not conducive to getting the funding your new venture really needs.
Think beyond the idea
Coming up with a concept and an idea that meets a market demand such as the compensation claim specialist claimsdirect.co.uk as an example, is just one part of the equation, and just satisfying a perceived need won’t satisfy potential backers alone.
A successful pitch for funding will have to answer a lot of pertinent questions and some of them are crucial, but tend to get overlooked far too often.
You need to look at issues such as how much it is going to cost you to get each customer as well as being able to determine how much your product or service will need to be sold for in order to cover all costs and be able to generate a profit.
You will also need to satisfy an investors requirement to know when you expect to start moving into profit and how your offering shapes up against existing competition in the marketplace.
Be sensible with your financing needs
Nothing is more likely to deter a potential investor from backing your business with their cash than either asking for more money than you need, or not enough.
Not knowing whether you need £50K or £500K is going to be a serious turn-off for potential investors and any lack of credibility created by holes in your financial projections will see quite a few doors closing and thin out your options far too readily.
Taking less investment will ultimately need that you will minimise shareholding dilution and it is far better to give away 10% of your business than having to concede 25% in order to get maybe more money than you actually need, so work the numbers and get professional accounting advice to make sure the figures are credible and realistic, as savvy investors will soon spot any holes in your financial plans.
Prepare yourself
Investors are effectively buying into you as much as they are buying into your business, so if you don’t come across well in your pitch, it will seriously hinder your chances of getting funding, even if you have an exciting idea to bring to market.
Take the time to prepare yourself and rehearse your pitch, so that you can deliver a polished and confident performance and answer any questions directed at you without hesitation.
Many of us will have seen the reality TV series Dragons Den, and although some aspects of the show only bear a passing resemblance to what it is really like to pitch your idea for money, you will notice that those that secure funding often come across well and build an instant rapport with the dragon’s.
Having a great business idea is just the start of it, you need to be able to pitch your start-up perfectly if you are going to get the investment you need to turn the dream into a reality.
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