Establish what type of investment you need and how much you need. You must also present your investors with evidence of how you established this need. You will not impress investors if you sat down one day and determined you needed $ 50,000 to start a business. Offer a rational explanation of the basis for your need and do not overlook the amount to which your need for the investment will also go some way to explaining how it can achieve a return.
Outline exactly why you need capital; why it is necessary for your business to succeed and how you are clearing success in this case. Explain how it will benefit your business venture because investors do not want to give up their money for nothing. Not only do they want a return but they are going to be looking to see that your business can actually generate better results with their capital invested than it would without it.
Whether you are looking to get one person or a few wealthy individuals to invest, or you want to meet your capital requirements by having several smaller investors put up $ 10,000 to $ 250,000, raising capital is about providing an organized and concise method of investing into your transaction and accommodating money. A business plan, while super important, simply can not do these things by itself.
Business start-ups and start-up expenses
Investors do not particularly care about the details of when and how you started incurring expenses for your business, but they will want to know the total expenses for the business and how you have financed your business so far.
Like it or not, as soon as you conceive of a business idea, you start incurring business expenses. It's a chicken-and-egg problem trying to figure out which comes first. Startup expenses can be particularly steep and it is not uncommon for businesses to incur debts early in their startup phase.
To provide investors with a clear impression of the financial history and status of your company, you should detail specifically how you have handled startup expenses and back up the information you provide in your financial data.
Show them how will you make money
Your business plan must address this question in some detail. For the purposes of capital acquisition, however, you should also revisit the issue and confirm for investor how your business is going to operate to become profitable.
To explain how you are going to make money, you should also mention your USP is the key feature of your products and services – your business as a whole – that allows you to stand out from the competition and otherwise inspires people to buy from you. If you do not know what your USP is, you do not have a business venture ready for launch and you can not possibly have a marketing and sales strategy in place that will generate any real results.
Discuss how you are going to build your market and make the sale of your products and services profitable, ensuring that your business makes money.
