Whether you’re a startup or an established enterprise primed for growth, you’ll likely need to raise capital at some time during the business life cycle. Raising capital can be tricky and requires quite a bit of preparation.
Here are a few ideas you can use to raise capital and market your company:
The first thing you need to is a reliable business plan that maps where your company is now, where it is going and what is needed to take it there. The business plan is much more than a profit/loss projection; it must account for every expenditure and detail how profits will be made and who will receive them. Investors want to know that they will see a return on investment and that you have a solid plan, so you must include taxes, employees, supplies and marketing in your business plan. How many postcards and other direct-mail pieces will you send? What will it cost to hire a designer,to build a mailing list, to print your postcards and mail them out? You can get instant pricing on these items through an online printing company such as PsPrint.
Once you’ve laid out your business plan, you need to find investors. There are many resources you can tap here, including:
Venture capitalists and angel investors
These are individuals and organizations that stake a living on making sound business investments. It will usually take a very good business plan and the willingness to give up a few concessions to attract the eyes of one of these investors.
Friends and family
Many people are hesitant to borrow from their friends and family, but these people already trust you and are probably the most willing to go out on a financial limb. You should still present a strong business plan and make sure all parameters are clear: Is this money being loaned to you or given to you? One novel way to raise capital from family and friends is to hold a business benefit with all proceeds going toward your business growth.
You can sell public shares to raise capital for your business. Consult a good attorney and accounting firm to make sure you understand the legalities associated with publicly traded companies before you decide to go this route.
Once you’ve raised enough capital for your business, you must follow through with the marketing guidelines laid out in your business plan. Invest wisely in your marketing strategies. Know who your target audience is and where they are so you can put together a robust direct-mail campaign, and also successfully advertise across other channels such as online, television, radio and print publications. Don’t forget to send out an investor newsletter to everyone who has a stake in your company – you must encourage open communication.
Raising money for your business can be daunting task, but if you’re diligent and accurate with your numbers, follow through with your marketing campaign and make good on your promises, you can achieve success. Success breeds success – if your investors are happy, they’ll be willing to invest more money the next time you’re ready for business growth.