5 Steps Entrepreneurs Should Take Before Seeking Investment

Preparation is the most important aspect of ensuring that you secure investment capital for your business venture. You want to show investors that they are dealing with somebody that’s going to create a business that can successfully generate profits. After all, they are investing their money to get a return on investment. Here are five steps you need to take to help you increase your chances of securing funding.

1: Create a Solid Business Plan

Investors want to know that you’ve done your homework and that you have a solid plan for your business. They go through numerous pitches from small business owners on a daily basis, so you want to show that you have a plan that is realistic. With that said, creating a great business plan is not easy.

You need a have a strong plan for early to mid-phase of your business. You’ll have to know how you’re going to develop the products or deliver on your services. Ask yourself: will I be able to produce my products or deliver on my services in an economical way? You’ll need to show that you can compete in the marketplace and create a marketing plan for how you’re going to generate new customers.

Cash flow is another important part of your business plan. It needs to be clear what much the monthly overhead will be and what the projected gross/profit numbers are. Showing financial stability along with a strong business plan will be the foundation for securing funding.

2: Show That Your Numbers Work

While you can be optimistic in the uniqueness and viability of your idea and venture, nothing is more convincing than raw numbers. If there is an existing marketing campaign that’s working, show how much is being spent and how much profit is being generated. Get proof that the business works in terms of numbers.

Analyze your customer base and try to present data that shows how often customers are coming back for repurchases and how much each customer is worth in the long run. If you can show investors that your business is already working, you’ll quickly gain their interest.

3: Think About What Advantages You’ll Need

Obviously, you are seeking the financial backing from investors. Successful entrepreneurship, however, goes beyond just money. An investor can offer you far more than just capital for your venture. Investors can do a whole lot more for you from helping you secure business partners, finding top talent for your business, to providing you the right strategy for your venture.

That’s why it’s important to think about what can take your venture to the next level? Could a key partnership give you a competitive advantage? Do you have a great product or service but lack the vision and long term strategy to reach your goals? Choosing an investor is about more than securing the necessary funding.

4: Research Your Investors
Make a list of investors or investing firms that you wish to attract. It will help to network and reach out to other entrepreneurs that secured the funding that they needed so that you can get vital information on what these investors are looking for. Also, make sure that you figure out what kinds of terms are attached with these investors.

This is where you want to ask questions about how you want to work with an investor. For example, how much of your business are you willing to give away for funding? How involved do you want the investors to be? The research will help you get an idea of which investors could possibly be the right match for you.

5: Perfect Your Pitch

Even if you have a unique and promising venture, you still need to sell it to investors. They want to invest their money in a venture that not only works, but also has an outstanding return on investment potential.That’s why you need to have a carefully crafted pitch that appeals to your ideal investors.


You need to give them a strong reason on why they should choose your venture. Investors know they’re being sold to, so it’s important that you back up your statements with facts, research, and data. You want to avoid selling based on hype and over-optimism.

Like many small business owners, you may not be the best speaker or presenter, but it is vital that your presentation is solid. Focus more building a strong presentation backed up with facts. If you really believe that your venture speaks for itself, then your pitch will be the missing piece for securing funding.