Thursday, 18 January 2018

Information and commentary for the small business banking industry

Help your customers make their business attractive to investors

28 Oct

What are investors looking for?

One of the things that might come up when you’re chatting with your small business customers about raising capital is the possibility of outside investors. This is often a good option if a business has something unique to take to market, or they’re seeing such a rise in demand that they need to boost their capacity to meet it.

Helping them understand not only what investors are looking for, but how to make their business stand out as a potential investment option, will increase their chances of success, especially if the investors they have in mind are also customers of yours. If that’s the case, you can facilitate the discussion by providing introductions – this will help the investors trust the business they’re considering.

Enhancing business attractiveness

There are key factors that investors take into account when they’re deciding if a business is worth their time and money. Going through some of these with your small business customers will help boost their business’s credibility to potential investors:

  • Getting any debt sorted is Job #1. Investors like to know their money is being put to work to increase profits, not pay off debt.
  • A strong, professional business case is just as essential. Help your small business customers prepare with a clear business and strategic plan.
  • Help them make their pitch as clear as possible, and in just a few minutes. Investors want to know that they can explain their business succinctly, but briefly. It’s worth practising the “elevator technique” – imagining that a pitch has to be made during a 3 minute elevator ride. The key is to explain quickly and clearly how a business can make a lot of money.
  • Help them to show investors they’ll have some control over how their money is used by agreeing to funding instalments that are based on achieving goals.
  • Keep the focus on benefits and financials. In most cases, the technology behind a product line isn’t really of interest and if it is, they’ll ask.

If your small business customers aren’t aware of the types of investors they could approach, provide them with a bit of education around angel investors, venture capitalists and crowdfunding options. Work with them to choose which type of investor would be best for their business.

If your business customers are looking to take their business to the next level or to develop a great new idea, getting investors on board can be a really effective way of securing the funds they need, and you’re ideally placed to help them achieve it.

Finally, get them to check out the following:

Here at TSBC, we can offer you great content around how to educate your small business customers about investment options. Contact us on sales@tsbc.com to find out how we can help you.

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