Got an Offer? Need Funding? 5 Steps to Get Funded!
Every entrepreneur starts with an idea, whether it’s for a great new product or a service that will revolutionize an industry.
But do you have enough startup capital to REALLY bring your offer to the market? Building a successful business takes more than an inspired idea and a vision—it takes planning, discipline, research, and a whole lot of money.
As someone with a solid operations background, I am well familiar with the steps involved. If you have a great idea but no funding yet, here are five steps you’ll need to take to get investors!
Step 1: Get a Mentor to believe in your vision.
When you ask for money, people will automatically be skeptical and want proof that your idea is viable. But is it? Have you gotten the objective opinion of someone who has been in your shoes? Someone who has previously been successful at bringing offers like yours to market?
Finding a mentor is an essential step in the entrepreneur’s journey, and a good, experienced mentor will give you honest feedback about your concept. After all, you don’t want to waste your time on an unmarketable idea. A true visionary will have lots of ideas throughout their career, so there’s always another opportunity around the corner. Make sure the one you choose to execute is the right one!
You can attend networking events like Copy Accelerator put on by Justin Goff and Stefan Georgi, or Uncommon put on by Ed O’Keefe. There are so many Masterminds where you can seek out people who have experience. While attending, you can leverage people in your network to connect with a mentor.
Step 2: Perform market research.
Finding your target market might be the most challenging step of making an idea into a business, but it’s also one of the most important.
When doing market research, ask yourself these questions:
- Who are you targeting with your product or service? Age, gender, education level, and other traits should be included. The more specific you can get, the more likely you are to succeed.
- Are people interested in your product? Many entrepreneurs waste a lot of time and resources on their idea, only to find little to no demand.
To conduct your research, you should use various sources to examine the opportunities and pitfalls of the market. You will also need to gather direct data from your target audience. All this can be accomplished relatively simply by surveying current and potential business customers, testing focus groups, conducting one-on-one interviews, utilizing social media polls, and observing data through platforms like Google Analytics.
Step 3: Determine your capital needs and write a business plan.
Throughout your research, you’ll get a more realistic idea of how much funding you’ll need. I can’t tell you how many times we see visionaries come up with an idea, start executing purchase orders, or write a VSL script without determining any research that should decide whether they should move forward with it.
Even if you manage to get a crowdfunding campaign off the ground or find a way to fund your startup yourself, running every aspect of the business can go way beyond your initial capital needs for launch. You have a successful product, but because of poor planning and poor execution, it will never make a profit.
Once you’ve determined what you need and have a spelled-out plan, you can begin looking for investors. It’s essential to have a solid idea of how much money you need to start and grow a business. Your mentor may help you come up with a ballpark number you can use when seeking funding.
In addition to knowing how much money you’ll need to get your business off the ground, you’ll need to show potential investors how you intend to use it. You can do that by creating a business plan. Writing a business plan may seem intimidating, but it doesn’t have to be as long as it contains the most critical components, such as your target market, product information, financial plan, and the metrics you’ll use. The plan doesn’t have to be long. The more concise you can be, the better. There are tons of online resources to create a business plan. Once you’ve done the first two steps, it is simply a matter of inserting your findings.
Step 4: Enter a contest.
Major corporations know there are entrepreneurs out there with fantastic ideas who need funding. To find the best of the best, many of these are offering contests for entrepreneurs. The competition may be fierce, but hey, someone has to win! If you have done the research and believe in your idea, it’s worth trying to get someone else to believe in it too.
You can find contests and requirements here.
Step 5: Consider outside investments.
After following the steps above, you are ready to seek outside investors to generate more capital and start your journey. There are several ways to generate funding, with some of the most popular including:
- Small business loans
- VC funding
- Crowdfunding
- Angel investment
Each of these options has its pros and cons. For example, loans allow you to retain the most control over your company, but the requirements and repayment terms can be difficult for some entrepreneurs to manage. You will need to examine which option is the best for you carefully.
How do you attract investors? Start by talking about your business with everyone you know. Leverage your network, see who’s interested, and have a formal pitch prepared before you have any meetings with potential investors. Practice speaking about your idea with friends and family so that you are comfortable with questions about your plan.
The more prepared you are, the more it will appear to investors that you have thought through everything. Investors want assurance that your company has a good chance of giving them a healthy return on investment, and won’t be interested in funding you unless you can prove you have the product and the plan to make your business a success.
Don’t waste time; follow the steps IN ORDER.
If you have an idea for a new business, don’t jump ahead from steps one to five. You’re just likely to waste everyone’s time. A mentor who will be honest with you and help you make your dream a reality is worth their weight in gold. I have several clients who gave up 5% of their company to have a mentor advising them through the process.
Take the time to test whether your idea is a good one and do the research before you seek investment. To set yourself up for success, don’t jump straight to funding. Prove your idea. After that, it’s time to get everyone else excited and find the perfect funding source for your first round.
Author: Emma Rainville