Friday Focus: Gaining Investment
In order for any business, no matter the size to scale and grow to its fullest potential, it needs to receive some sort of investment. Whether internally with knowledge and the training of the people involved with the company, or externally via an input of capital and partnerships.
Capital investment can give a business the fuel to grow and is often a smart and efficient way to scale by leveraging cash flow via the upfront financing.
Investments in business are used to create, generate or obtain an increase in top line revenue. Finances can be used to purchase new equipment, hire new employees or personnel with specific talents or expertise, obtain new knowledge, training, or materials to develop a more profitable end-product.
Many business owners and start up founders realize the all-important need of cash to scale or just get their business off the ground. As Newton’s law of physics states, objects not in motion stay motionless until acted upon from an external force. The object is this instance is the business, and the external energy is the input of cash, without which the company stays in a stagnate state of limbo.
Receiving financial investment is often tricky, it requires an extensive network, confidence and the business owner to have a strong sense of understanding their business’ product or service idea’s value, potential and profitability.
Obtaining investment is a selling process. Investors or any lending institution will require critical information to even consider inserting cash into your business.
That’s why it’s essential you present your idea in a clear, concise, exciting and easy to follow manner, along with outlining the scalability or the brand, what it is or does, the value it brings the consumer and how it stacks up vs competitors. Finally, and most important, providing a roadmap highlighting how and where the company will generate revenue and sustain profits.
This is where a professional business plan comes in. A well drafted, thorough and concise business plan defines your business, vision and a strategic road map to profitability.
Business plans encompass all the elements an investor is looking for and help answer the questions outlined previously, chief of which being: “how and when will I see a return on my investment?”
Investors invest in order to make money. Sure, they may think you’re a cool guy or gal, have a fun personality, swank branding, a futuristic idea, but the principal reason for an investor injecting capital into your brand is to get a swift and substantial cash return.
Many entrepreneurs and business owners miss realizing this. Investors, whether individuals or organizations have a plethora of avenues for which to make returns on their capital, real estate, stock market, other established businesses and so on. Why should they go with you a start up? How are you better and why will you be able to get them a greater return? That’s where the business plan comes in. It’s your blank canvas to paint the clear picture, a beautiful scene with gorgeous colors leading them to view the giant pot of gold - the potential investment return and by creating one with the right structure with a clearly defined vision highlighting ROI your painting goes form boring street art, to a modern-day Picasso.
Research, write and create, outline a vision that works then create the blueprint for your business, this will not only allow you to stand out, but entice and lure the all-important cash investment. With clarity comes progress.
To get started on creating your personalized business plan contact us.
- Vince Calace
Founder - Venture Business Development