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Six Steps to Convince Investors

Before the launching of your business, one of the biggest and often ignored challenges is obtaining funding from investors. Pulling investors into your business can be a herculean task. The question is - "How can you convince an investor to shell out his financial resources?" Apparently, the solution is not very simple.

Fresh entrepreneurs are often asked to present their business plan in detail. They might be well skilled with efficiency to handle a business and reap profits out of it but pitching an investor is entirely a different story. An entrepreneur has to prove himself worthy of the funding that is required to kick start the business. Investors come up wit several questions that might psychologically attack the entrepreneur's confidence.

Successful entrepreneurs often have hard-learned lessons and experiences to narrate with regards to the pitching of investors. A meeting with an investor will prove to be the most educational and informative experiences of your career. Everything, in retrospect, is obvious. However, you need to be prepared with a few tips that will assist you when there is a need for convincing the investor to provide funding for your business venture.

Less is More
Never present a lengthy version of your business plan to the investor. prolonging presentations will not impress the investors and they are likely to get displeased. Present the business plan in a short span of time. Make it understandable. If the investor has trouble understanding it, it is assumed that the customers will face the same difficulty too.

Hypothesis is High-Risk
Provide the facts, not the fiction. If you have a viable plan, defend it with low-risk strategies. Present the plan as if you have already executed it. Investors need to see the reality aspect of the business. A low investment and and a high return of investment impresses them.

Reasonable Projection
Provide the investors with the big picture but do not lose focus on the realistic aspects of the plan. Fictional financial graphs and false claims will become a black mark in your business plan. A financial projection has three approaches -  Best Case, Moderate Case and Worst Case. Make each of these cases viable and defend them well. Investors will be pleased eventually.

Cost Cutting - A Boon
Investors do not find unnecessary expenditure appealing. Therefore, make low operated budgets and prove that you are fiscally efficient in handling the business plans. Make room for flexibility but limit the same to an extent.

Slow & Steady
Your business is like  baby. It needs to crawl before it can walk. Convince the investors that there will be a definite gestation period but also induce that the business will emerge out of the nutshell very soon. Sales techniques, marketing strategies and decision handling procedures needs to be sketched out to the investors. Investors appreciate a sustainable growth rather than a wiggling scenario.

Know-It-All, not Everything
Know what you need to know. When it comes to what you do not know, take help from the professionals. Let the experts guide you. If you are smart enough, you will keep a company of smarter people around you. Investors appreciate a good management team as much as a great business plan.

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