In the previous article we discussed ‘What is the best funding type for your company?’ and now you have an answer, you have the opportunity to take the right action in order to get the desired investment.
Yes, we need an innovative, world-changing, disruptive idea. Deep inside we all know that our idea will be magical and that every clever investor will come running. Unfortunately, this is not how it works in the real world – unless your idea can cure diseases or make us immortal!
But let’s assume that your idea cannot work miracles and that you’ll need to work hard to get that investment!
1. Overview of the market
In order to make any investor believe that your idea will be the next Google or Facebook, you must know your market and most importantly if there is a market for your product/service. You can look at your competitors and how they are operating in the market. Find out what will differentiate your idea from theirs.
2. Powerful team
For most investors the idea and the team behind it carry the same weight when deciding on whether to invest. Motivation and hard work will mean that you can handle any problem and reach all the goals on time.
3. Understanding the potential customers
You must analyse your customers and what they want. What is your target group? Do they need your product? How do they make their decisions, and what influences their buying process? Make sure you have answers to all these questions before showing up in front of an investor to pitch your idea.
The truth is that the main reason that people invest in any company or idea is to get their money back and earn more. Bearing this in mind, you must prepare market and financial strategies. Show the investor what will be the cost of new customers and when you plan to break even and start making a profit. In the best possible case, go and test your strategy before pitching your idea.
Is your idea scalable? I bet you will hear that question when introducing your idea. Carry out research and imagine where your product will be in five years from now, what it will look like and what value it will bring?
Include them all!
All of the above mentioned points should be included in business plan. Spend as much time as possible looking into every aspect and evaluating every possible outcome.
If you want to have more leverage, test your idea with potential customers. See what they think about it and if they will spend money on it.
Be prepared before you pitch your idea, and know your market!