For the vast majority of SMEs, and especially for those of new constitution that are being initiated, attracting investors is key to getting ahead,as an investor will be a source of financing that will provide an economic injection that will allow an entrepreneur’s project to be carried out, in exchange for a risk-based calculated interest.
The problem is that since last March, with the outbreak of the coronavirus pandemic, attracting investors has become an increasingly complicated task for SMEs,having to strive and prepare more and better than usual.
At a time of economic crisis, investors must see a very clear business opportunity to decide to invest,which does not cause uncertainty and is barely at risk.
Aware of this difficulty, at AYCE Laborytax we will tell you how to attract investors to your SME in the COVID-19 era and thus get the momentum that your project needs to get going.
You are interested in:
Tips for attracting investors to your SME in times of crisis
#1- Innovative idea
There are many companies to invest in, so if you want to attract investors to your SMEyou need to have an innovative idea that differs from the rest and is attractive to investors.
It is a fact that investors want profitable but also original projects,which are able to stand out and bring something different in the sector. If you have an idea with which you manage to solve a problem before anyone else, have no doubt that many investors will be interested in your SME.
#2- Business Plan
Having a good business plan is essential to attract the attention of investors,as around this plan will rotate the whole approach of your SME.
When conducting the business plan it is key to carryout a complete market study, through which you can analyze the competition, detect possible business opportunities, meet your target audience, make a forecast of expenses and revenues, etc.
In addition to an innovative idea and a good business plan, you need to have a complete and quality team. The investor will value the quality of the team, but also the entrepreneur’s ability to bring talent.
It is important to have a team with talent and specialized in different areas,highlighting that quality is more important than quantity.
When presenting your project to the investor, you must prove that you are fully involved and that you will put all your efforts into getting ahead. One of the most important points for investors is that you feel that both the entrepreneur and the rest of your team are passionate about the business idea,as well as that they firmly believe in it.
If you manage to convey that enthusiasm to the potential investor, you will have a lot of land gained.
#5- Industry knowledge
Another key factor in attracting investors is to know in detail the sector to which your SMEbelongs, as this will transmit greater knowledge to investors and give peace of mind, since the more knowledge, the greater the entrepreneur’s ability to make sound decisions, seek solutions, give guarantees, etc.
#6- Product or service
A potential investor will greatly appreciate having a product or service to analyze,as this will give you an idea of the SME’s ability to work and its quality. For products, it is important to have an MVP (Minimum Viable Product), while a service should have a beta version, prototype, or demo.
It will be much easier to attract investors if your project generates sales or has customers from the first moment, as this will be a demonstration that your product or service is having a good reception from the public, and that it is also offering a good performance.
Don’t forget that an investor wants to make money, and seeks to get the highest return in the shortest possible period of time.
#8- Use of efficient capital
The entrepreneur’s good ability to optimize capital is key for theinvestor, as capital management is one of the most representative points for future investors. It is therefore important to make efficient use of capital, so that investors do not perceive unrealistic expectations when investing.
Here are some of the main tips for attracting investors to your SME in coronavirus times, which will make your project more attractive and easier to stand out from other competitors.