“If you invest nothing, the reward is worth little.”
– Richelle E. Goodrich
Presenting your idea to stakeholders and asking them to make an investment in your business is not an easy task. Good news is, the answer to this is being prepared. The first step to preparation is trying to see things from your stakeholders’ perspective.
There’s more and we’ve got you covered. Here are the five most important things that any stakeholder wants to know before making the decision to invest in your idea.
Is your idea profitable?
Stakeholders’ main concern will be whether or not they can get back their investment with a profit. You need to approach investors with a sound financial plan that proves that your idea has excellent financial prospects. What are your potential sources of revenue? What other investors have shown interest in your idea? Do you have the numbers to back you up when you say that your business can generate the kind of returns you are proposing?
If you can convince stakeholders that you have done your homework and present an airtight financial plan, they will be more willing to invest in your idea.
Do you have the right background and experience?
Personally, I would feel much more comfortable entrusting my money to someone who has shown me their expertise. Stakeholders think the same. You should be able to prove to stakeholders that your odds of success are high because you have the right background and necessary experience. Have you overcome many obstacles and challenges to get to where you are today? Has overcoming those challenges made you a better leader and entrepreneur?
These are the kind of stories you need to be prepared to share with potential investors. When pitching your idea, your passion and commitment should be evident. This inspires confidence that you have what it takes to breathe life into your ideas and stay on track even when things get tough.
Is your idea unique?
You’re part of a stream of people trying to convince stakeholders to buy into your ideas and invest in your business. Every one of these entrepreneurs believes that their idea is worth the investment. To really capture the attention of stakeholders you must come to them with an idea that they have not encountered before.
Even if the idea itself isn’t unique, your approach to it must be. Think about Uber and Airbnb. Their ideas aren’t so unique, people have always needed taxi and hotel services, but they turned the market upside down by coming up with innovative strategies. By being unique, you can prove to your stakeholders that your idea or business strategy will make their investment worthwhile.
Do you have a sound business model?
Your business will start to display its strategic value as soon as it begins to generate profit. When engaging with your stakeholders you must be able to present an innovative business model. This is what will guide you towards making your business profitable. To design a sound business model, think about what it is that you bring to the market and how you can do it in a way that is unique and will set you apart from the competition.
Think about what kind of model you should employ to ensure that your business remains sustainable. It is important to note that different stakeholders will be drawn to different attributes of your business plan. So, do your homework first. Study your stakeholders and then customise your business plan to show how you plan to address the issues that are most important to them.
Is there a sizeable market for your idea?
At the end of the day, whatever your idea is, you must be able to prove to your stakeholders that there are people on the other end that are willing to pay for it. Your market research should show your stakeholders that the customer base for your business is not only significant but will remain stable or grow, over time. Stability and potential for growth are two key characteristics that stakeholders look for when deciding on what ideas to invest in. Show your investors that you know who your customers are, and that you know how to engage with them consistently and effectively.
We really hope that with this information helps you prepare a successful pitch for potential investors. Are there any other tips you would like to share with your fellow Motherland Moguls? We would be happy to receive and share your feedback and comments on this article.