Money doesn't solve everything, but it's a critical part of running a small business. Not only does it help get it off the ground in the first place, but investment rounds during critical times will allow you to grow and strike when the iron is hot. Unfortunately, there's a lot of competition looking for investors of their own. You have to make your business as appealing as possible if you want to attract vital capital to your company.
1. Know What You're Fixing
All products solve problems, and you should know the problem that your product solves most of all. Understanding why and how the issues exists, whether it's something light as a need for entertainment or more important like network security, is how you'll come to develop an effective product. This will also make you more convincing when it comes time to deliver a pitch to investors. They know that your product has innovation ahead of it. What they're looking to find is someone who understands the consumer enough to guarantee that the product will develop properly.
2. Have a Strong Market Position
Investors want winners. Some want them so bad they're prepared for nine out of every 10 investments to cost them money. They want to commit to a company with potential, and nothing says potential like a strong market position. Since you're a small business, they're not going to demand that you dominate the market, only that you're doing well for what you are.
3. Win Big
Slow and steady growth is fine, but don't forget to go for big wins. Hitting huge milestones is not only good for your business in terms of presence, but it's also great for attracting interested investors. Nothing gets the money flowing like big leaps in product development and great sales numbers.
4. Be Accessible
Your small business is likely going to stay under the radar, no matter how much success you achieve. Investors will likely not come knocking, either because they don't know about you or because the expectation is you'll come looking for them. In either event, it's a safe move to have contact information available on your products and on your website. You can also join lists online to further expand your visibility.
5. Put Together a Team of Experts
You don't have to do everything on your own. In fact, it's probably a bad idea. Focusing on your own thoughts limits the future of your small business. Open yourself up to new ideas and form an advisory board that has the sole purpose of improving both you and the small business. Not only is this great for your company's development, but having one gives investors peace of mind since it shows you're willing to listen to others.
6. Put The Company Out There
Simply doing well is often not enough to get investors to notice you. Get out there and get eyes on you in an authoritative light. Work with reporters for big press releases, and angle for coverage by participating in community events. Get people and press talking about you, and you'll have an easier time convincing investors that you're worth both their time and money.
7. Study the Competition
More often than not, there's room for both you and the competition. You can work with the competition, and even if they don't want to work with you, you should study them. If they're in the running, they're doing something right, something you can replicate to further improve your own performance. This is important for investors who are looking ahead, as this means you're more likely to be open to cooperating with other companies, which increases potential revenue.
8. Move Fast
Indecisive small business owners are anathema to investors. While running a company is more a marathon than a sprint, quick decision making is still important. Not all of your calls will pay off, and that's OK. What's important is you're decisive, and that you study the fruits of your choices before choosing to change course.
9. Get Your Metrics Together
When pitching to an investor, it's all about the numbers. While your ideals and values do matter, it's the metrics that will ultimately decide whether they throw in with you. Show them that the metrics are on your side and they'll likely commit their capital to your company.
10. Study the Industry
The more you know about your industry, the more appealing you and your small business will be to investors. Nothing screams potential like a leader who knows what he's doing. It doesn't stop at studying though - be part of the industry. Join the community and establish yourself as an authority. If you have to tell people you know things, you've already lost.
Investors are naturally wary of small businesses. While investment numbers have improved since the financial crisis of 2007-2008, they're still careful. Keep their fears at bay by working hard, being an authority, doing well, and showing promise, and your company will find its funding before you know it.