Possible Issues In Funding And Ways To Tackle Them

by Susan Paige on March 11, 2019 · 0 comments

The funding process is a complex one and is highly competitive one at it as well. You will find it very difficult to access in most of the times when you need it the most especially in you have just started your business. There are several issues that make the funding process such a complex and complicated one.

Typically, investors, private and otherwise, are presented with a large number of requests for funding. In most of the times, only a handful is selected out of these. This is because the process of finding the right type of investor for your business commonly necessitates a lot of effort and time.

There are several things you should know and do as an entrepreneur in order to get the desired funding such as:

  • Researching on the investors
  • Reaching out to them
  • Knowing about the interest it will attract
  • Ensuring that the investor have the amount of money at the time of your need and is willing to invest in your business and
  • Both of you are willing to take on the risks involved in funding.

Even if all these criteria are met eventually, it will probably take a long time to process your funding and you may not have that much time to wait. Since you will need the money as soon as possible to get your businesses going the road to funding for you will probably have a lot of obstacles that you need to overcome so that you can raise the required business capital.

Ways to address these issues

No matter how discouraging the above facts may sound to you, there is no need to be discouraged by these common funding issues. There are lots of simple ways to address these for your benefit and make everything work in your favor.

  • First of all, you must have a good understanding of the market.
  • Apart from that, you must know about the level of competition that you may face.
  • You must also be able to convince the investor regarding the funding by demonstrating it through useful and reasonable figures and data.
  • You must have a very clear idea about your business and its prospects so that you can portray the idea that your business is based on potential gaps in the market and actual needs of customers.
  • It is also required to ensure that nothing is left to chances or there is any guesswork and instincts in your calculations and understanding of the market. You can use one of the several existing tools for that matter.
  • Planning plays a very important role because all investors will expect a well-thought, immaculately designed and a clear plan of your business. Whether you visit a brick and mortar bank or sites such as https://www.libertylending.com/and its likes, they will want to know about how your business will develop over the years, what kind of investments you think is needed to make and how do you plan to repay the money loaned to you.
  • It is always good to have a contingency plan no matter how small it is, in case you do not manage to get the necessary funding now. Show it to the lender as well as that will significantly portray your ability to tackle unexpected situations and succeed in difficult times. A plan B is always helpful to showcase your management skills.

You must also show the lender how your business will thrive in case there is a slump,demonstrate your ambition, strategic thinking skills, level of persistence, professionalism and commitment, and all other essential virtues that will make you successful as an entrepreneurs.

Convincing the investors

A lot depends on how you convince the investors whether you will get the desired funding. You should not undervalue the importance of the pitch which must be engaging and passionate. This is a good strategy to grab the attention of the investors and probably the only way to do it.

Remember, you will hardly get more than 15 to 20 minutes to convince the investor who have a lot of funding applications to review and business owners to interview. It is therefore recommended that you follow these steps:

  • First and foremost, keep things simple and easy to understand, more reasonable and believable as well.
  • Make sure you focus on the USPs of your business and highlight the competitive advantages that you may have over others. Demonstrate the needed passion and enthusiasm in you to engage his audience.
  • It is also a good and useful strategy to conduct a thorough research on the investors you wish to ask money from. This will help you to know who they are, how they work, what they prefer, value and expect. Accordingly you can adjust your pitch and even customize it according to theneeds and wants of the lenders.
  • If mobile apps are concerned you will be better off if you include anarchetype of the product in the pitch so that you can impress your investors. Showa first release version of the product so that the investors understand the idea behind it and also prove that you are professional and believe in your idea taking seriously enough.

When you want funds for your own business it is a great idea to combine both internal and external funding sources.

  • If you start with bootstrapping, it will show that you are more comfortable and willing to move as far as possible depending on your own capitals and have also taken into account your current financial capabilities.
  • If bootstrapping is not enough,you can also try out your own network of friends, family and colleagues to get some additional funding.
  • You may also use an incubator’s services which is a very useful way to get an opportunity to cut down the initial investment needs. This will also allow you to focus on the development aspect of your business, the market conditions and your competitors as well.

All these approaches will make sure that when you go for the investor for funding you are well prepared, better off with more equity and increased chance of necessary funding.

Author Bio

Marina Thomas is a marketing and communication expert. She also serves as a content developer with many years of experience. She helps clients in long-term wealth plans. She has previously covered an extensive range of topics in her posts, including money saving, Budgeting, business debt consolidation, business and start-ups.

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