Why should investors invest in your business

First, an investor won’t demand repayment every month because their involvement is not a loan. An investor can also be a reliable source of business advice and may have a strong business network that you can draw on. Still, you should understand that investment isn’t free money, your investors will be expecting a share of profits in return.

So if you decide to seek funding from investors, here is what you need to convince them to choose to invest in your business.

1. Previous years business performance

Early stage business investors want to see your profit and loss account of previous 2 to 3yrs back. If you can demonstrate that your business will make them money, who wants to invest in a business which is loosing money? Manje kana business rakorisina paperwork yatofa yaka loader.

2. A good business plan

A good business plan demonstrates to investors that you’re serious about your business and that you’ve given thought to your plans to make money. If past performance data shows that you’ve historically succeeded, a business and financial plan will show that you will continue succeeding in the future.

Among other things, your business plan should include:

Your intended market, with data to show why that market is your target
Sales targets, with data to show how those targets will be achieved
Analysis of the competition for your product or service
Timeline for when you’ll start making money
Potential obstacles and how you are going to deal with them

3. New product or new service

The bottom line is if the market is saturated with hundreds of identical products, then your company isn’t likely to be a huge hit. Tell investors what it is about your product or service that makes it stand out. Is there market potential for your unique product? Does it solve a unique problem? Is it a brand-new innovation or invention? You don’t have to have come up with a brand new invention, but you do need to show why your product or service is different from or better than what your competitors offer.

4. A good market for your product or service

You need to convince investors that there is a big enough market for your product. To do this, first lay out data proving that there’s a large market opportunity . Then, explain in detail how you have an advantage, how your business model makes you unique, and what problem you’re solving that your competitors aren’t.

5. why are you into this business

Investors can be swayed by a great narrative about why this business matters to you, where the idea came from, and where are you planning to take it to. How will it change the world? What makes it special? Opening your pitch with your story is a great way to set the tone and draw your potential investors in.

6. Your background and experience

Your business idea is only a small piece of what will push the business to succeed. So in addition to your idea, investors want to know more about you. What experience do you have with this business and industry, or with business in general? Have you start a business before? You’ll need to explain everything in your pitch.

7. Passion in what you want to do

Where others call it quits, a passionate person keeps fighting, launching new products, trying new marketing strategies, and coming up with new ideas. That’s the kind of commitment and determination investors are looking for.

8. Are you ready to start the business

Many people have great business ideas, but not many people have the drive and ability to shape those ideas into a working, financially viable business. Show your investors that you’re ready to walk the talk.

9. A reason they should put in their money in your business

Your investors aren’t just going to hand you the cash you want and walk away. So they want to know exactly why you need the cash and exactly what you plan to do with it. They’ll also want to know when they can expect a return; that should be a part of your business plan. Investors will also be looking for an exit strategy, and you need to think about that in advance. When they want to sell, will you buy them out? Can they sell to another party? They want to know that they can get their money out if things start to go bad.

10. A good clear business investment structure within the rules and regulations of the country

Buying ownership of a company has legal complex, and investors will want to know that you have already considered them. You need to have a business structure in place that allows other parties to buy in. You also need to have a clear plan for how the investment will work. If the investors are partners or shareholders, will they have the right to make decisions in that business?

Part of this involves having a clear valuation of your business — a way to back up your request for a certain amount of money in exchange for a certain amount of ownership. If you want $100,000 for a 10% share, you need to be able to show that your business is actually worth $1 million.

Attracting investors