How to Transform Small Businesses in the US into Investor-Ready Outfits
More businesses are coming up in the US now more than ever. There is still a need for small business owners to equip themselves with the tools and skills that will help them attract investors. Funding a small business continues to be a thorny issue for many startup entrepreneurs. The lack of funds to some small businesses in the US comes at a time when there are so many financing options. Different financing options including banks, governments, angel and venture capital firms and Initial Coin Offerings (ICOs) have come up. Unfortunately, some small business owners are still not able to attract financiers or investors.
According to a recent survey, more than 60% of small business owners in the US lack capital and cash flow. Mainly, these entrepreneurs are looking to grow their businesses even after successively raising sufficient funds to launch their business. This problem is further compounded by many new startups that make funding opportunities more elusive. To that end, there is a dire need for entrepreneurs to know how to attract investors. Below are two fundamental and effective ways that small business owners can adopt make their enterprises attractive to investors.
Build a Solid Brand Story
Most marketing experts and consultants view storytelling as one of the oldest and most powerful marketing strategies. A brand story can be especially effective for businesses with small marketing budgets. In most cases, a brand story helps businesses looking to get the word out about their enterprises to woo more customers. In addition, a brand story can go a long way to help investors connect with your business. This may be possible even without stepping into a single investors’ conference.
A solid, authentic, and viable brand story is essential to any business. You will rarely nudge investors to action by packed PowerPoint slides or dense spreadsheets. Nevertheless, you may successfully persuade investors by how well a business’s story feels to their mind. Often, investors are often attracted to an established business or business idea via a relatable brand story. You may succeed in winning the hearts of investors even when the facts and figures say otherwise. This because it helps them connect the dots much easier. Many online resources that can help the average business build a good brand story. The primary requirement is having an internal and external view of your business. Consequently, you will be able to address investor demographics, how your current story relates to investors, and your strategic vision.
Determine a Suitable Funding Platform
Over the last few years, financial technology has spurred the growth of new funding platforms while enhancing most of the existing platforms. In addition to ICOs, there are other new funding models such as crowd funding and P2P lending. These models have transformed the business financing landscape for startups and small businesses.
However, because these funding platforms are out there does not imply any of them will be a good fit. Some small business owners fail to attract investors because they neglect to align their business models with appropriate funding platforms or investor profile. It is natural for businesses to keep their options open when it comes to finding an investor or securing funding. Even so, making the same pitch to different investors is casting too wide a net. In the end, it is most likely to fail to arouse the interest of investors.
Notably, investors and lending platforms will often vary greatly and pose different requirements and challenges. This requires an entrepreneur to align a business model and core mission with a specific type of investor. For example, ICOs have grown wildly popular over the past few years and can be a good option for any business when done correctly. On the other hand, over 80 percent of ICOs are turning out to be frauds. Investors are now turning their attention to businesses with active products and services and not merely the promise of a brighter future.
In Conclusion
An angel or venture capital firm will seek to support a small business every occasionally. All the same, they may usually want to collaborate with a business that has a history of success within a specific niche. Seemingly, this can be a tall task for a young business.
Therefore, it is prudent to build a brand if you were fortunate to obtain sufficient funds for your business. Remember to keep it in mind kind of investors you would want to bring in. When the time is right, you will get the right investor with a genuine interest.
We would like you to grow your small startup to one of the greatest and profitable businesses in the US. Due to this, our dedicated team is continually coming up with tips to grow small businesses in the US. If you would like to get more information on the approaches to growing your business, read more articles on our blog. Alternatively, you can contact us.
More from Mount Bonnell Advisors:
