When you first get an idea or discover a way to expand on an already running project, you probably also immediately have this irrepressible urge to run out and get funding for it. However, you would most likely being doing yourself and your idea a disservice this way. You are skipping several steps that can make or break your latest venture before you even get started.
The first person you need to sell on your idea is yourself. Look at it from all angles and decide how best to approach the situation. Developing a successful strategy is not going to happen overnight. Think small at the beginning. Find a small team and convince them there is a market for your product. Have the necessary research and data available for them to see. Even better, have either sales or presales to back up your pitch. If you have the ability to tell this small group of investors that X amount of capital in your business idea will yields Y amount of revenue, venture capital firms will be all ears. When you show them that you have strong growth metrics or sales associated with really great margins, you will have your pick of firms who will both be very interested and want to fund your business.
This is what most startups or small businesses still struggling to find investors don’t quite seem to get yet. While you may see investors as wealthy individuals who have lots of cash to spend (especially because you see them buying luxury homes, cars and yachts), they don’t necessarily just throw cash into the dustbin for every idea. Every investor is looking to make profit in the end and convincing them your idea can help them realistically bank profits is a quick way to get their funds. Most often, if you do the preliminary survey and analysis and believe in your own idea, it’s often easy to sell such idea to the investor. Investors would rather spend money on extra luxury items (at least it would allow them show-off one way or the other) than to give a random stranger hiding behind the idea of having a business plan.
One discouraging statistic you need to keep in mind is that 9 out of every 10 startups will, in fact, fail. This is the truth, so be prepared to fall on your face once or twice, or potentially even more. Be sure not to take it personally, and continue to strive for success. Try to maintain an open mind. Being as prepared as possible is a huge indicator of success. Have solid research or sales results to bring to initial meetings with investors to keep them listening to your ideas.
Following the ideas laid out below will also increase your chances of success:
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