Whether your business is already established and in need of some extra funds, or if it is brand new and you need some cash to get off the ground, it is vital that you understand the need to prepare for any meeting where you will be looking to raise funds for the company. My friend Chris works with Sertant Capital, a group which lends money to businesses specifically for the purchase of equipment. Chris is often perplexed at just how underprepared people are when they come searching for an investment, and that was much of the inspiration behind this piece.
If you are in need of cash then you have to prepare well in order to secure it, and here’s how.
Where To Go
If you aren’t sure about where the best place is to go for your cash then you should consider the following options as the easiest places to go:
- Bank Loan
- Angel Investment
- Family and Friends
- Industry Specific Location Such As Sertant
There are multiple options in front of you, and with the exception of the crowdfunding page, you need to know your stuff.
The first thing which you will need to know and clearly understand is the current state that your business is in. You should have an understanding of how much money you are making, how much net and gross profit and how much money the business has right now, if anything. You should also be aware of any outstanding debts which the business has, all key information for someone who is going to perhaps lend you money.
The next piece of information which you will need to arm yourself with is a business plan for the next 5 years. You should have a clear vision for where you want to take your company, what growth looks like and what levels of success are you looking for as a company. Anyone who plans to give you money wants to know that they will get it back, which is why having a business plan in place makes perfect sense.
Finally it is going to be very important that you have a clear understanding for what you are going to do with the money that is being given to you. Down to the last dollar you will need to have costed out every aspect of what you will be spending the money on, which again proves that you have a real head for the business and for what you wish to achieve. Simply turning up and asking for a $10k investment is unlikely to yield you much success, if you don’t have a clue what you plan to spend that money on.
You must prepare well and ensure that you are armed with all of this information before you go into any meeting looking for some funding. You will be asked these questions and if you don’t have a clue, you may not end up with that money you so desperately need.