So, you’ve got a great idea for a business. All you need to make it work is some capital. If you can’t fund your business venture entirely on your own, you will need to get some outside help. This means turning to banks and investors for help funding your dreams.
While there are plenty of banks and investors willing to take a chance on a new small business, the reality is that you can’t just have the money for the asking. You need to show that you are worth the risk, and that your business idea is likely to succeed. You need to come across as professional and competent. Here’s what you need in order to show banks and investors that you are serious:
A Good Business Plan
If you want to convince banks and investors that you are serious, you need a good business plan. Your business plan should show that you have put thought into your idea, and how it will work. The elements of a good business plan include:
- Executive summary that provides an overview of the plan and your company. You should include what your business hopes to accomplish, as well as state the basics of your company (product/service offered, mission statement, biographical sketches of founders).
- Company description offering a more in-depth view of your business structure. This should flesh out your company’s purpose and organization, as well as describe how your product or service offering will satisfy your target market. Don’t forget to include information about principal officers and experts.
- Market analysis showing that you understand your market and audience, and that you “get” the state of the industry, as well as where it is likely to go in the future. Detail your company’s strengths in the market, as well as the weaknesses, and how you plan to address them.
- Marketing plan that indicates how you will get the information about your product or service to the target demographic. Show that you understand your target audience, and that you are willing to put your business out there to get the sales and earn the revenue.
- Financial projection and funding request should offer your views on what to expect in terms of gains for the company, and what you want from the bank or investor to get to that point. Make sure you are realistic.
Your business plan can provide you with a blueprint for putting together a great presentation that will impress a bank or investor, and that will indicate that you really have thought about the situation, and you are capable of executing.
Demonstration of the Product or Service
You should be able to demonstrate -- or at least thoroughly explain -- your product or service. If possible, bring a prototype product. If you need funding to develop the prototype, make sure you have plans and blueprints of the product. You need to be able to show that you have thought about the feasibility of the product, including the materials you need for manufacture.
If your business focuses more on services, illustrate the services you are offering. You need to be able to show why they will be in demand, and the difference you bring to the table. In fact, whether your small business is based around a product or a service, you need to be able to clearly explain what is different about your business, and what makes it better than what else is out there. Your demonstration should clearly show your understanding of your target demographic, as well as indicate that what you have will be different from, or improve upon, what’s already out there.
Solid Research and Experience
Because banks and investors are putting up their own money, they want to know that you are competent. Show that you know your stuff by presenting solid research. Whether it’s marketing research, demographic research indicating that your product or service would be in demand, or whether it’s research about financial projections for the industry (or all of it) you need to show that you’ve done your homework.
Don’t forget to present your experience and expertise. Your small business should reflect your strengths and abilities. If you are lacking in some area, make sure you have a partner or team member that can supply that lack. Being able to show a bank or investor that you have a good team, with experts, will improve your chances of success.
In the end, your presentation is mostly about preparation. Good preparation, and a plan that’s well thought out shows that you really are prepared to go all the way with your small business. Preparing ahead of time with a business plan, demonstration, and good research can also help you in terms of confidence. Your ability to project confidence in yourself and your business can also go a long way. All of that preparation will ensure that you are ready to go -- and that you can convey that readiness to banks and potential investors.