What Investors Look For When They Check Your Business Out

Building a business and a brand means thinking beyond just yourself. You need to consider how people envision you as a partner or a potential investment. Being a smart business owner means knowing when to seek out some help or partnership.

Investors want the most out of their contribution, so they need some assurance that their money will be going to good use. Finding the right investor for your business means getting things in order to make a great impression. Here are some things investors look for when choosing a business to work with.

1. Excellent Financial History

When attempting to find investors, they need assurance that your business is healthy from a financial perspective. Profits are a good measure of this (and more on that later), but they need reviews and audits of the company, and you, as well. One of the biggest things they will look for is a credit score, so repair software can help you and other co-founders get back to a good score. This financial history should be about three years of coverage so investors can comb through and see how responsible you and your business are as well as determine valuation.

2. Have a Growth Plan

Investors want to see that your business has potential in the future. It needs to have scalability and realistic goals that can help it grow, as investors are not sinking money into a stagnant product. You have to develop a short term and long term goal projection, calculate costs that it will take, resources needed, and potential problems and solutions to help reach this goal. A good growth plan will excite potential investors if it is reasonable and well put together.

3. Proven Record of Profits

Just like your financial history, you need to prove your business is not just a pipe dream. A proven record of profits will show them that you have been successful to a degree in the past and that their investment would likely help push you farther into the black. Businesses and start-ups that receive quality investor interest have a detailed report on profits, expenses, and margins to provide insight into the business’s potential.

4. Prepare a Great Pitch

Investors will not just be looking at spreadsheets, documents, and numbers. They want to meet with you and other members of the business to discuss who you are, what you stand for, and where you would like to go. Presenting a great pitch requires excellent sales skills and communication abilities. A good piece of advice for business owners is to find someone who can be the lead salesperson. It adds trust in the business when investors know that there is an equally capable team member who can fill in when you, the owner, is not present. Include multimedia elements so the pitch is not drab and lifeless, and practice each talking point until it is ingrained in your memory.

5. Show Quality Leadership

Being a great business owner means being a great leader. The word boss has negative connotations and investors want to know that their money is helping make a true leader actualize their potential.

investor - leadership

Showing quality leadership in the pitch by giving equal opportunities for your team to present material, as well as having a solid history of relationships with partners, co-owners/founders, and employees help show them they can trust you with their money to make things happen positively and proficiently.

6. Bring In An Experienced Supporting Cast

Business owners are not on an island where they have to shoulder all the work. While you do need to handle a lot, you also need that strong supporting cast that has been mentioned prior. This means a good, capable team of employees, it could mean quality partners that are equally committed to the business, and it means other members of your cast. The reliable supporting cast like legal counsel can be a relief for an investor to see. They will recognize this as a commitment to caution and preparedness which shows that you and the business are ready to handle any significant problem that comes your way. Giving investors a reason to trust the team as a whole is a good way to get the funding and support you need.

Getting your business from an idea into a reality can require some help, and even existing businesses may need a little push to grow. Finding investors is how you add capital to improve your workforce, get more tools for your work, and improve your business plan. These tips show you what things investors will want to see and how you can attract their attention.

Dragan Sutevski

Posted by Dragan Sutevski

Dragan Sutevski is a founder and CEO of Sutevski Consulting, creating business excellence through innovative thinking. Get more from Dragan on Twitter. Contact Dragan