Attracting investors to your small business: A guide

Published: Mar 18, 2019

You’ve got a unique idea.

You’ve got the skills to put it into market.

But if you haven’t got sufficient funding, your business may never get off the ground.

Attracting investors to your small business is a crucial, and challenging, part of creating a commercially viable company.

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Don’t be daunted, though. In this article, learn some top tips from insolvency specialists on how to  attract investors to your company and keep your small business afloat.

Get your business plan in order

Your business plan is the key selling tool when it comes to seeking investors so it must be compelling.

Investors tend to be busy people. Make sure your business plan includes a succinct and punchy executive summary to grab their attention.

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By including key figures in this section, investors will also feel reassured about what you have already achieved.

Expect your financial forecasts to be scrutinised. To project the right image, make sure they are clearly and professionally presented.

If possible, try to also include a forecast of your future intentions and expectancies for the coming twelve months – and be prepared to talk about them.

Investors are looking to make money and need to be convinced that they will do so – hence why your plan and demonstration of financial competency is critical.

Master your pitch

Investors will be hearing pitches regularly. How will yours stand out?

Storytelling is a great technique for cutting through the facts, stats and data – giving your business a personal and relatable feel.

If you can explain the story behind your business and product/service offering, while delivering the key business information, you’ve got a good chance of gaining attention.

Keep it simple, though.

As mentioned above, it’s unlikely that investors will have a lot of time on their hands, therefore a concise pitch is likely to be preferred.

Remember, practice makes perfect. Know your pitch inside out. Not only will this give you confidence, but you can be sure you’re delivering all the key points required to win that funding.

Build your network – on and offline

Get yourself out there – the average entrepreneur spends 66 hours a week working but that shouldn’t necessarily be a bad thing!

Industry events and local business forums are a great way to meet potential investors – and less nerve-wracking than a formal pitch situation.

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Don’t just be a wallflower! By participating in discussions, you will have opportunities to show off your business skills and industry knowledge – two things investors are desperate to see.

But don’t limit yourself to offline networking.

Like many people, investors tend to have well-rounded profiles on their social media channels (LinkedIn is your friend). Find them. Friend them. Follow them.

Look for themes and topics that they are regularly posting about and engage with these. Demonstrate your understanding and respect for their work.

Once you’ve broken the ice online, it may feel more comfortable when requesting a face-to-face meeting, whether that’s simply a coffee, or something more formal.

Of course, you may realise that a potential investor is unlikely to be a good fit for your business. That’s fine – by carrying out due diligence, you’ve not wasted any time pitching to the wrong audience.

Back yourself to get backed!

You wouldn’t be launching or running a small business if you didn’t have guts.

Not everyone can cope with the pressure and accountability that being your own boss brings.

You must display confidence in your business – and confidence that a potential investor will make a profit.

Even if you’re not a confident speaker or networker, you can display confidence by knowing the facts about your industry, your finances and your business plan.

Investors need to know their money is secure.

If you don’t show conviction in the profitability of your plans, you aren’t going to get that funding.

Attracting investors to your small business

There’s no denying that attracting investors to your small business isn’t easy with 4 in 5 entrepreneurs funding their own companies.

Ultimately, It takes hard work. You need to have laid the groundwork with a great business plan and strong industry knowledge before someone will consider investing.

You also need to master the pitch (and know who’s worth pitching to).

But it’s worth the effort.

Attracting investors to your small business could be the difference between success and failure for your project.

Hudson Weir are London-based insolvency specialists, with a wealth of expertise guiding companies through debt, bankruptcy and insolvency.