When you set up any business, the one thing that will rule your life for the first few months at least is money. Even if your business is designed to be altruistic as possible – for example, if you are setting up a not-for-profit – you will still need cash behind it to make it happen. The same thing goes for investment, which is how a lot of small businesses begin. You may dream of becoming, for example, a successful property developer, but lack the initial funds to take on the kind of project you would like to. In these circumstances, you may require some financial aid from investors, who will put money into your plan with the expectation of an eventual return. Investors and business owners alike should be aware of the risks involved, of which there are many. But just like taking out a mortgage to pay for your home or any other kind of capital loan from your bank, investment is much the same – except it comes from specific people or companies. If you are in need of an investment to get your business or project off the ground, here are a few ways you can attract good investors and manage the investments professionally.
Have a fault-free pitch
Investment is quite a big deal. You probably wouldn’t put your own money into someone else’s business without being totally confident that it was the right thing to do – so with this in mind, you need to get the investors on your side. One way to do this is by presenting a flawless pitch. You may not always pitch in person – it could also be over the phone or via email – but you need to make sure you tell your potential investor everything they’ll want to hear to get them on board.
Keep them in the loop
Once you have hold of your investor’s money, the last thing you should do is to use it and never get back to them. Not only is this wholly unprofessional, but it probably goes against the contract you originally signed with them. Always keep your investors informed of any progress you are making with the project or the business, so they can be confident that they can trust you with their money. You can click here for advice on how to do this via a monthly email, or you could even set up regular face to face meetings to discuss your progress.
Keep your promises
This one goes without saying: but once your targets have been reached, you have to pay up with the agreed return. If the whole project bombs and your investors are unlikely to see a return at all on their money, you will need to seek immediate legal advice. However, if your investments were made under the promise of equity in the company, it is everyone’s responsibility if the business fails. Bear this in mind when choosing what kind of investment would be best for you.