How to Raise Money to Start a New Business
Author: ajaero tony martins
Author: ajaero tony martinsThe issue of raising money to start a business has always been one of the major challenges faced by entrepreneurs. The ability to raise money to start a business is one of the tests you must undergo as an entrepreneur. In your quest to raise money to start a business, you are bound to face a lot of obstacles. However, tackling the challenge of raising money is not as tough as you think. In this article, I am going to share with you vital information on how to raise money to start a business. Join me as I bring to you 3 keys to raising money. The first and the basic key to raise money is the feasibility of the business idea. This is always the first question any investor you approach will ask. All investors will want to know how profitable the business idea is. They will also want to know the expected return on investment and the time frame. Never embark on a quest to raise money without a viable business idea. Now how do you know the profitability of your business idea? You can know this by carrying out feasibility study on your business idea. I recently wrote two articles titled "4 Reasons Why You Must Conduct A Feasibility Study Before Starting A business" and "How To Carryout Feasibility Study On Any Business Idea." You can go to my blog to read the articles. Another requirement in the process of raising money is a good business plan. Whenever you want to raise money to start a business, your first move should be to put together a comprehensive business plan. A business plan should include details of your background, education, training, experience and any other personal qualities you possess. Personal qualities and experiences are often regarded as assets to your business. Your business plan should have to explain in detail how the money you need is going to be utilized. If the money is being raised for an existing business, you will need to show the profit and loss statement for at least the previous six months. The plan should also show how the money you are raising will yield interest and profit. If it is a new business, you business plan will have to explain in detail your proposed business idea, expenditure, your market research, your financial projections and so on. Your business plan should also describe in detail what makes your business unique and how it differs from that of your competitors. Your plan will have to state precisely what the investor's return on investment will be, when and how you are going to pay it. The next thing to look into when you want to raise money to start a business is your personality. You must be conscious of your appearance when approaching an investor. Always remember that you have only a chance to create an impression in the mind of the investor. Don't appear rough and unkempt, try to look professional. If possible, give yourself a nice hair cut, put on a black or blue suit with polished shoes and a tie to match. It will do you a lot of good. Appearance matters a lot in the game of raising money for your business. Lastly, a standing principle that will determine the success or failure of your quest to raise money for your business is your manner of presentation. This is a key point that can never be over emphasized. The way you present your business idea to your investors matters a lot. The better you are at communicating with your investors, the better your chances of raising the money you need. You must also display a high level of confidence. If you are not good at approaching prospects or you fear rejection, I will recommend you either join the toastmasters organization, take a course in sales or you study books such at "How to win friends and influence people" by Dale Carnegie. Doing any of these will help you increase your communication skill. Having said all this, let me give you some extra tips on ways to raise money to start a business. One of the easiest way to raise money for your business is by advertising in a newspaper, magazine or national publication featuring such ads. You can place ads in publications such as entrepreneur magazine, the intelligent investor, wall street journal or any other relevant publication. Another way to raise money to start a business is by joining a network of entrepreneurs. I know of some entrepreneurs network that link entrepreneurs with bankable business ideas to investors. So check in your community for such network organizations or better still, you can go online and search for one. You can also raise money for your business from family and friends. You can go about this by setting up a surprise party and inviting your family and friends over. While the party is on, you can use the opportunity to let them know your intentions. You can then go ahead to explain the business plan, the profit potential and how much you need. Give each of them a copy of your business plan and ask those interested to indicate and see you privately. A twist to this tactic is that you can equally turn the party to a fund raising event by asking your family and friends to donate towards your project. The last method you can employ when raising money to start a business is to approach private investors, venture capitalist and angels. You can equally sell stocks of your company through investment bankers. In conclusion, always bear in mind that your ability to raise money to start a business depends on two factors. One is the viability and profitability of the business idea while the second is your lies in your ability to convince the investors. I wish you all the best in your quest to raise money for your business. Good luck. About the Author:
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