In today’s piece, I have decided to share a pertinent issue concerning budding entrepreneurs (this includes anyone starting up a business regardless of their age).
Based on the business proposals I have received from individuals seeking to either establish or effectively operationalise their business ideas, I have come to realise that many people need to hone their craft in writing compelling business plans and also learn how to communicate these plans effectively to potential investors with gusto.
If you have ever wondered what investors look out for when they seek new businesses to invest in, then, I suggest you read through this article carefully to understand what you need to do or what you might have—basically through sheer ignorance—been doing wrong.
As an investor, I understand that the majority of the business ideas many of us see aren’t exactly ground-breaking—many businesses already have tons of rivals waiting in the ‘labour jungle’; therefore, I and many other investors interested in investing in people’s business ventures are not majorly after unprecedented business ideas; not that ground-breaking ideas are hard to come by, but it would be unrealistic to always demand that people create virgin business ideas. If these virgin ideas have been ascertained and proved viable, investors will indeed invest in it.
There are existing businesses that can be creatively remodelled in ways that they can potentially become income generators which investors are genuinely interested in hearing how entrepreneurs have planned to implement them–it’s all about what you have to do differently from others to become visible enough in the market.
First, make an elaborate plan on how you intend to achieve your business goals. Your plan should capture the type of market you are venturing into, the target customers, the major players in that market and their market shares— that show the market dominance of these players— represented in percentages.
Knowing the dominant brands in your industry—and I also think empirically determining why their products or services are preferred—is key to facilitating a better plan for your infant business.
For you to successfully do this, an initial survey—or feasibility studies—is principal; the data you gather will help you navigate your way in the industry.
secondly—and most importantly–investors gauge your passion for and knowledge of the job when you are pitching it to them.
Some budding entrepreneurs can come up with beautifully written proposal (this, undoubtedly speaking, is not the defining factor for selecting what to invest in) but do not possess the zest and the communication skill to help convince an investor.
Some have the zest but the communication skill—likewise the ability to write a compelling proposal—is not there; and—mind you—even if you have Aristotle’s wits as an orator but lack the enthusiasm needed for your business, it will always be evident through your gestures, voice pitch and facial expressions.
Whatever business you are venturing into, just make sure you have some form of experience or tutelage. Once that is not in view, you are most likely to lose your pitch. You can’t just wake up and decide to venture into any business: Your experience matters.
Why do I look out for passion mostly? The answer is not far-fetched: The Bible says ‘Seest thou a man diligent in his business? he shall stand before kings; he shall not stand before mean men’.
Even in rough times, I believe that a passionate entrepreneur is patient enough to see his business through. At the end of the day, for you to be able to convince investors, you need to be passionate and knowledgeable about the business you are venturing into, you need to be eloquent enough to convey your convictions about the business, and you need to put in writing a compelling piece— well-detailed for that matter. Rest assured, you will get potential investors.