As a formal and serious business, your funding journey should commence with a professional business plan. A lean or normal business plan is good, however, a professional business plan gets your chances skyrocketing. The most basic of the funding tips you must understand as an entrepreneur is; a professional business plan is a vehicle for funding.
Another funding tip you must understand before you start seeking for funding from investors is that investors are only interested in products or services that customers are willing to pay a price for. It is not just about a product or service that customers wants, however, one they are willing to pay for. And your investors expect the payment from the customers to lead to profit over time.
Now, how good you can present this claim about the customers’ desire for your offering in a professional business plan or pitch deck goes a long way in getting you the funds you desire. In the remaining part of this article I’ll be walking you through some very important funding tips that can give your funding pursuit an advantage.
More Funding Tips To Get Funded Without Wasting Time
There are several other factors that improves your chances of getting funded asides the basic two explained above. Here they are:
- Funding Tips: Your professional business plan or pitch deck should present good profit potential in less than 5 years.
- Funding Tips: Investors are more interested in a market and product that can yield a high rate of return quickly. Let the target market in your professional business plan and the business model really explain how well you understand the specific people or category of people you want to sell to and how you’ll make a profit.
- Funding Tips: Everyone loves something big, and your investors do too. They actually prefer large markets with high growth potential. Every investor wants to see a high Cumulative Annual growth rate (CAGR) in your market analysis. It drives investment decisions.
- Funding Tips: If you deceive yourself about the competition, your investors are not. They know competition exists, either directly, indirectly, or in the future. You should show how you are different from the competition, and how you plan to maintain the distinctiveness.
- Funding Tips: Investors don’t give their monies to a business entity, rather they invest in people. In simple terms, your co-founders are as important as the business concept. Investors need you to show the ability of your management team in driving the business to succeed in your professional business plan.
- Funding Tips: Well, you believe we all have trust issues when it comes to money right? Your investors do too. They only want to invest in something they know the founders are committed to. If your cash is in it, then you won’t want it to fail. Your investors want to see your financial commitment in your business plan.
- Funding Tips: Sweat equity is good, however, nothing beats financial commitment. Don’t make the mistake of just highlighting out your sweat equity, your investors want to see the money you have also invested in your financials.
- Funding Tips: Don’t overpay yourself. Don’t also make the mistake of not paying yourself, your co-founders, or employees well. Not paying well is a major sponsor of lack of motivation and productivity. However, don’t overpay yourself at the beginning. It’s a big turn-off for your investors. They are not interested in seeing how well you will eat away the money they invest rather than grow the business with it.
- Funding Tips: Now, you know what they say about how dreams become a reality, right? It starts with making conscious, sizable, and actual plans. Your investors have a keen interest in your strategies and expansion plans.
- Funding Tips: Now, don’t look like a clown in your projections. Don’t overdo it and don’t underdo it. Many entrepreneurs are known to underestimate how much they need to kick start and keep their ventures going for five years. Don’t shoot yourself in the leg. And this can also be a big turn-off for many investors. So, you can actually work with professionals to get your projections right.
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