How can you make your company attractive to an investor? What steps demonstrate that you are a serious proposition and will be successful? This blog covers eight things you can do to prove your idea is a winner. In fact, if you do all eight, you may not need that investor so you get to keep all the results of your effort. So what are the secrets?
Whether you are looking for customers or investors (Friends, Fools, Family, Banks, Business Angels or Venture Capitalists) you need to demonstrate that your idea is going to work and is worth backing. The more evidence you can provide that your vision is achievable, the less you’ll have to work at finding money (or put another way, the less equity you will need to sell). As you move down this list, you will be demonstrating that your business will be a success:
- Vision. Know what your product/service is, who it is aimed at and who is likely to buy it. Identify the size of the likely profit margin using a Business Thumbnail. Only if the profit it is large enough proceed to the next step.
- Create a company. Your company is a legally separate entity that will contain all the assets of your idea and eventually generate you a wage. Setting up a company is one way to demonstrate that you are creating something that will last and could be sold at a later date.
- Develop a Pitch Pyramid. There are four documents or descriptions of your business: the sentence, the paragraph, the executive summary and business plan. Each should draw the listener or reader to the next stage. After the first two, you may well have a sale.
- Operating Prototype. Create the service or product prototype. This will prove your idea and provide you with something you can sell to the first customers.
- Team. Establish a great team of people around you to support you and your company’s growth. Look to professionals (coaches, mentors, lawyers, accountants, marketing specialists, etc.) and those with good networks. Look out for people that would make good board members in the future.
- Create buzz. Using the knowledge of your customers, start promoting your ideas in places they will be: create a website, keep a running blog, follow people on twitter, create a Facebook and LinkedIn profile, attend conferences, run seminars, etc. Establish yourself as an expert in this field.
- First customer. Sell your product or service to someone. This proves a need, the price, the profit margin, etc. Feedback from the first customers can quickly enhance your offering and give you the prospect of a case study or quotes.
- Many customers. With more customers you are demonstrating that there is a market within the niche for the first time. Now is the time to demonstrate you can sell more to your current customers establishing a continuing revenue stream.
By the time you’ve reached the last stage, you may find you don’t need that Business Angel after all!