So…you’ve got an idea. A great idea, one that’s sure to make you a lot of money and boost you into the international spotlight. There’s just one problem: You need investors. How do you convince the people with the money that you have the skill, determination, and passion to pull your big idea off?
Make your plan
When you’re finally visited by the idea fairy, it’s tempting to just charge full speed ahead. But not every great idea is viable as a business. Maybe you’ve come up with a great solution to a problem nobody has. Maybe people would love your product but it would cost so much to make it that you couldn’t offer it for a price your target customers could afford. Writing a business plan forces you to think through all the pros and cons of your idea, and any serious investor will expect to see one. The organization Dream.Design.Deliver. walks you step-by-step through the essential components of a good business plan.
Boil it down and spice it up
Potential investors want to see a business plan, but they’re not likely to read it unless you can first sell them with your executive summary – the written equivalent of an elevator speech. While your business plan should be all about facts and analysis, the executive summary is your chance to show off your marketing skills. You need a hook – a catchy explanation of the problem you’re trying to solve, the need you’re trying to meet, or the pain you’re planning to eliminate. Think of the executive summary as the writing on the book jacket of the last novel you read…the part that convinced you that you wanted to spend your time reading that book.
It’s all about you
Sure, investors only finance good ideas. But even the best idea will fail if the person behind the idea can’t execute it. To convince investors to jump on board, you need to convince them of your expertise, passion, and persistence.
Shop in the right places
If you’ve got a good idea and present it well, you should be able to come up with some funding. If not, you might be looking in all the wrong places. Venture capitalists, for example, are unlikely to invest in a startup from an untested, unproven entrepreneur. That’s true for most banks, too. But that doesn’t mean the funding isn’t out there. You just have to know where to look.
- Wealthy individuals: Most communities have a core group of successful people who quietly invest in startups that interest them. Some may do it for financial gain, some may do it to improve their communities, and some just like helping new entrepreneurs get their start. This group includes individual “angel” investors as well as groups of business leaders often dubbed “doctor and dentist” groups. The key to finding these people is to be in touch with your community’s business network. Reading the business section of the paper, joining professional organizations, and attending networking events are good ways to make first contact. Once you do, it’s time to pull out your “elevator speech” and begin the sales process.
- Community organizations: Many communities recognize that encouraging growth and development benefits everyone. Talk to your local Chamber of Commerce or Small Business Development Center. If they don’t have programs to help you directly, they can point you in the right direction.
- Crowdfunding: Many would-be entrepreneurs are turning to crowdfunding sites to pitch their business plans. It’s a highly efficient way to reach potential investors with one presentation (kind of like putting your resume online). It also expands the pool of potential investors to include those who may only have a small amount to invest – because when you combine the small investments of 100 people, it adds up fast.
Practice and present
Even if you decide to find investors through crowdfunding, you still need to be ready for the opportunity to present your plan in person. That’s why practice is critical. Nervousness is a death sentence when it comes to making a presentation to a potential investor. If you don’t have confidence in your own plan, why should anyone else? You need to display passion, not anxiety. And the way to do that is by practicing. Pitch your plan to your parents, your siblings, and your friends. Pitch it in front of a mirror, and keep doing it until you feel comfortable. Because it really all comes down to you. Investors may love your idea, but they’re putting their money behind you. Convince them they’re making the right choice!