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Successfully Raising Capital for Your Business Start-up


Successfully Raising Capital for Your Business Start-up

Having a brilliant business idea isn’t enough to raise the money you require to build or grow your business. Not many business startups get funded –just a fraction of them (less than 5%) are able to obtain funding to build the dream business. Raising capital from external sources (beyond one’s own savings) is perhaps one of the difficult tasks or challenges that most start-ups face.

Investors on the other hand are also looking everywhere for the next big thing. But they’re not just throwing money at any startup. They are looking for businesses that are sustainable and promise market-beating returns, and many more. Here’s something you must know and do if you want to land the needed funds for your start-up or small business.

Know Your Industry

It will be a herculean task for a fisherman to attempt to raise money to fund his brilliant idea of building a profit-oriented hospital. The point here is that investors trust and believe in people who know their industry. Demonstrating that you are experienced and knowledgeable in the industry in which your business finds itself is a fundamental requirement. If you are raising funds to build an e-commerce platform for example, you must demonstrate mastery in online businesss, payment systems and other related matters. You cannot raise the money by fumbling through the basics.

Convincing Marketing Plan

To remain in business you must sell, and continue to sell. It’s as simple as that. To generate enough revenue and record decent profit, you must keep selling and selling. Investors want a clear and convincing marketing plan –how you intend to present your product to consumers and make sales. If you’re able to sell to them, and they buy it, then you’ll surely get the funding. If they buy it, they believe others would buy it.

Show Strong Financials

If you are already in business, (which you should), then you are expected to back your words with figures. Show your past performance and explain anomalies. You must as well show your financial projections for at least 5years. These should be grounded in sound and realistic assumptions. Because investors are concerned about the future of your business more than its past, your financial projections carry a lot of weight.

Talk With People Who Have Successfully Raised Funds

Finally, look for businesses in your region that have successfully raised funds. Find out how they found investors and continually learn from them. Also, you can approach VCs and Finance Shops to help you raise the funding –this often comes at a fee.

In most cases, you’ll need to write a solid business plan. This is expected to contain all necessary information that would help you raise funds from investors or lenders.

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