If you expect investors to revel at your super cool business ideas that’s not going to happen and you know that – the reason is simple; the economic recession many people have become jobless and since many of them have turned to businesses, the investors have become more choosy. You’d get the real picture if you visit a financial institution or a bank looking for funding for your business. You would definitely find people assuring you that they are going to approve loans for you, but no one knows for sure when that is exactly going to happen and if at all it is going to happen. So, the bottom line is – if you want to start a business you have to have money of your own! But, isn’t there any other way out?
Luckily for you, there is an alternative solution. We are talking about crowd funding. Crowd funding is comparatively new concept and has been devised keeping in mind the funding needs of small business owners. If you have a small business that needs an investor, you might not get funding from one particular source, but what if you get funding from several sources clubbed together? That is exactly how crowd funding works. Several investors would share the funding responsibly of your business and in return they are going to ask for a percentage of the profit or rewards. Sounds good? But how to get to these investors? Let’s find out.
• The first thing you need to have is a business brochure that clearly outlines your business plan and also highlights the investment risks. The brochure should look professional and should have every minor detail that an investor might be interested in.
• Once you have a professional looking business brochure, you need to select a crowd funding platform that you think would be best suitable for your business. If you are not sure about which platform to choose you could try talking to a crowd funding expert and he would be able to help you out. You should also keep in mind that the business plan you have should be able to bring you at least 20% return on investment because otherwise investors might not be very much interested in your project. In any case, if I start a business does not make more than 20% return on investment, maybe it’s not worth it after all.
• Once you have all of the above things in place, you get a little bit of marketing to reach out to potential investors. A tricky way of doing that is by offering juicy rewards. Of course your investors are going to have a share of your profits, but who doesn’t love a bonus? The bonus you offered them could be in cash or kind. The basic idea here is to gravitate into your business and not let them be taken away by your competitors.
This post has been written by Jessica who is an expert in crowd funding studies and has assisted in the preparation of several business plans for angel investors.