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20 ways to impress your investors and secure funding

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It is all about the money, honey-or is it? Du’s John Lincoln gives you the skinny on how to secure funding for your SME.

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May 30, 2012 5:58 by



“Our goals can only be reached through a vehicle of a plan, in which we must fervently believe, and upon which we must vigorously act. There is no other route to success.”  Stephen A. Brennan

If you are in the business of business, and if you need to raise funds, then a business plan is an imperative that you should spend time, effort and money on. Make sure that your business plan is SMART (Specific, Measurable, Actionable and Time bound)! You cannot be all things to all people indefinitely. If your plan is not focused and time bound, it in all likelihood is not a realistic plan.  Without a plan, you cannot raise funds, let alone act or respond to changes in the whitewater environment of business.

In business and in personal life, cash is the life line for everything we do. There are many sources of funding that a small business owner and or an investor can turn to fund their new business, and or mange the growth of an existing business. But how do you secure funding? In this article I will outline what lenders and investors look for before funding.

 

1. Owner credibility

Do you have references to attest to your character and professional and or entrepreneurial capabilities? People invest in people first!

2. Business plan

Do you have a well documented business plan? If you do not have, don’t bother wasting your time further. No one else will waste their time with you J

3. Vision and mission

Have you clearly articulated what the vision and mission of your venture is? This does not mean that you cut and copy paste from others to create your vision and mission statement. (I have seen this too many times).

4. Is the idea marketable?

First and foremost, you must have a business plan with a marketable idea. If it cannot be marketed, you are day dreaming.  Is your market reachable?

5. Target market

You should have a clear view as to who your target market would be and whether the market potential is realistic or unrealistic, too narrow or has high potential for growth.

6. Commercial model

How is money flowing to your business? Is it easy to explain or is it as complex as the Enron cash flows? Will the other players in the industry value chain tolerate your existence and let you “eat their lunch”?

7. Operating model

Do you have a well articulated process as to how your business would be run? These includes the processes on hiring, accounting,  product development, sales and marketing, supply chain management and other processes required to operate your business.

8. Business strategy

Is there a business strategy to execute on the plan? Is the strategy realistic?

9. Risk mitigation

Have you identified the potential market, technological, legal and human capital risks for your new venture?  If risks have been identified, do you have a view and a plan as to how you will mitigate these risks?

10. Profit potential

You business plan should reflect realistic profit potential in a reasonable period of time. The annual rate of returns should be high enough to compensate the risk that a potential investor is making.



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