Lexington, KY - There comes a time when many entrepreneurs and small businesses must consider the need for growth capital. Perhaps funds are needed to start a business, or to grow quicker, or to stay ahead of the competition. Whatever the reason, this is a big and important step for any company and one that should not be taken lightly. Here are some important steps to take when preparing for "first money."
1. Outline your vision
Investors want to see that you have a great idea, but better yet, one that you can articulate in a simple fashion. Before you boil down your vision, you must first take the time to fully evaluate your business, looking at external factors such as the marketplace need for your product and how you will fit within the existing landscape.
Next, examine internal pieces such as your expected revenue streams, costs, end-users, growth potential, ability to scale and more. This exercise will not only help you maximize your positioning and strategies, but also show investors you are serious; also giving you both a better idea of whether your visions are aligned.
2. Get the ball rolling
Going beyond an idea and actually putting your business idea into motion will not only demonstrate your ability to execute, but it might also make it easier for an investor to understand what it is you are trying to accomplish. Additionally, any initial clients, revenues or even profits can help to not only make your business model more promising to investors, but also improve your leverage when determining a valuation.
Consider that if you wait until your product or business idea is perfect, you might never get started. Also you can potentially recognize the benefits of being a first-mover as well as get invaluable feedback from your target users.
3. Surround yourself with good people
Having a strong team that shares your drive and diligence is definitely a plus and reflects well on your business. Outside of your core team, the more competent and diversely experienced people you can align yourself with, the better off you will be as you go through this challenging process.
4. Position accordingly
Start blogging, participating in social media, and sitting in on industry panels. It is never too early to start positioning yourself and your business within your ecosystem, and this exposure can be invaluable. Making yourself a known
entity within your industry will keep you and your business top-of-mind when future opportunities present themselves.
5. Qualify investors
While you will spend a lot of time figuring out how to position your business for investors, it is just as important, if not more, to consider everything an investor will bring to the table and how they will add value beyond the money.
Ideally your investor has a background with your intended business model and industry and can provide informed guidance, or they have relationships/reputation in your area of focus.
Often investors will be involved with complementary businesses and can cross-sell/cross-pollinate your offering, realizing real value for your business.
Also consider that an investor is somebody you will be working closely with in the years to come. Look for someone that primarily shares your vision in terms of how you see your business growing and that your communication styles are compatible.