How To: Find Investors, the Essential Tool Needed to Build Your Business

Posted by on August 24, 2011 in Business Financing, Business Management, Business News, Business Start Up Advice, Business Valuation [ 0 Comments ]

If you want to build a company from top to bottom you will need a hammer, screw driver, nails, blue prints, and workers to start – and by this I mean you will need tools. Unfortunately, the business making tools of today’s world are known as investors, and their hammers and screw drivers come in the form of money.

According to a Wells Fargo/Gallup Small Business Index study, small business owners spend an average of $10,000 to start their businesses. If you don’t think you will be the average start up business entrepreneur, Business Know-How offers a great business start up cost calculator to help you figure out just how much your specific new endeavor will cost.

Considering where you are going to get the finances for your idea and subsequent business truly is the first step into a long road of business excitement. In many ways, if you have a good, solid idea, finding investors can be the most confusing part of your starting your business. However if this is the case, there is no need to worry – if you have a good, solid idea, finding investors will not be as stressful as you might assume.

5 Steps to Locking In an Investor

Step One: Patent Your Idea

Investors will be much more likely to give you a meeting if you have a patent for your idea. If you do not have a patent, someone could easily steal your idea, and if this happens investors are aware that the chances they get their money back are slim to none. Getting a patent, however, can be expensive and will take some research, but in the end a patent is the best thing you can do for your future business.

Step Two: Create a Corporation

When working with investors, you will likely be dealing with a large sum of money, and this can be intimidating. It is always a good idea to keep your professional and personal finances separate in case something does go wrong. In that instance, your new recognized corporation will take the fall, not you personally.

Step Three: Create a Solid Presentation

You want to have a good presentation of your idea ready to go for future meetings with potential investors. You should create visual presentations, charts, and any statistics that could be relevant to why your idea is a good one.

Step Four: Find Investors

If you do not need millions of dollars, sometimes family members or small-business loans are your best option. However, if you really have a million dollar idea, you may need to work a bit harder to find people to listen to your million dollar presentation.  Try to talk to your banker about a small business loan, any business organizations you belong to, or go online to find investment firms that may be able to set up a meeting.

Step Five: Return the Favor

Investors put a lot of faith into you because they expect to get their money back (and then some). If you can return the favor and offer your investors shares of stock (which you will get when you incorporate your company), your investors will know you are serious and they will feel more confident in making their decision.

Finding investors will certainly take some time, and do not be discouraged if your idea gets turned down a time or two. However, once you have the final tool to help get you starting on the building process, there is no reason your business can’t be the biggest, strongest, and most attractive house on the block.

Photo credit: alohaliving.com

Editor’s Note: This “How To” blog geared towards small business owners will run each Wednesday, the goal being to assist small business owners in their day-to-day operations. As a small business owner, is there a topic you would like to see covered? If so, email: Amanda.DiSilvestro@resourcenation.com.


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