Five Things to Have Down Cold When Pitching Potential Investors

If you’re looking into buying a business opportunity or any other small business for that matter, you may be looking for investors to help you get started. Or, if you already own a business, it’s likely you will need additional capital to sustain you or to grow, if not now then some time in the future.

Whether it’s your local bank or simply your family members or friends, no one in their right mind is going to help you out financially unless you’re able to articulate what it is you bring to the table that makes you and your business a good gamble for their money.

That’s why it’s important that you have answers prepared and rehearsed in advance to at the very least these five questions, one or more of which any shrewd potential investor is likely to throw at you just as soon as you start talking:

1. What’s your track record of success/past experience? Few people want to put their money on a horse that’s never run a race. If you’ve owned a business before, then you can capitalize on that by talking up the things you learned as a result and how you plan to integrate that knowledge into pursuing your newest endeavor. If not, that’s okay too. Just focus on the skills and assets that you’ve acquired either on the job or in school and why you believe they will help you succeed as a business owner. Make a concerted effort to link your skills, interests and experiences to your most current goals and articulate how they directly relate to the specific business opportunity or other small business you are interested in buying or currently running.

2. Have you analyzed your marketplace? Anyone who invests in you or your company is going to want to know if you’ve done your homework, as well as what you found when you did it. Do you know your competition? Have you created a demand profile for the products and services you are offering, one that takes into account current trends, demographics, logistics, pricing and any other factors that might have a bearing on your profitability?

3. How are you different? Part of assuring any investor of your potential involves being able to describe how you plan to set yourself apart from your competitors. And if there is little to no competition in your area for what it is you’re selling? Knowing and communicating how you plan to position yourself strategically to make the most of what may be a brief opportunity is critical.

4. What is your overall marketing/sales/distribution model? When you buy into a legitimate and proven business opportunity, franchise, distributorship or licensee opportunity, you’ve got a leg up when answering this question. After all, the strength of these business models lies in the fact that the hard work of crafting an overall strategy for business success has been done for you. All you have to do is implement it. And while that may sound simple on the face of it, any smart entrepreneur knows that’s far from the case. Entrepreneurship in any form is about hard work, determination and having a realistic understanding of what it takes to succeed at every level.

5. What are your actual plans for the money? While this question might seem obvious, it still warrants crafting a formal response ahead of time so that you will be prepared to answer it clearly. Do you plan to use the money to cover your startup costs? Do you need to hire additional staff? Or is it for new product development or marketing materials? Whatever the case may be, you should make sure you are prepared to explain exactly how it is you intend to use the funds you receive. Additionally, if it’s a loan, you need to be clear on how it is you intend to pay it back and over what time period. If it’s a gift, then consider yourself lucky.

 

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