WHAT EVERY INVESTOR WILL NEED TO KNOW BEFORE THEY INVEST IN YOUR BUSINESS.

1. Do you have a formal account system?
Whether you are a multi million dollar company or a small business, bookkeeping is necessary for success.It will help  monitor your expenses and the behaviour of your customers, it will help you discover new avenues of growth  and sudden changes in vendor costs .
Having monthly or quarterly financial statements provides a clearer picture of your business than your bank balance does.
So go ahead and employ that accountant or invest in accounting software or an accounting course

2. A framework of how they’ll make money.We invest to make more.money,will your business do that for us?show us how

3. Is your product or business scalable?

This is a common question for every investor but what does it really mean?
Say you own a small restaurant and sell about 80 plates a day. Then one day someone writes a newspaper article about how awesome the food is . Suddenly hundreds of people start showing up. Do you have the ingredients, equipment and manpower needed to produce more food each day without any additional costs to sustain your new customers?  if you hadn’t planned for it there’s no way its possible. Therefore your business is not scalable.
Think about it this way most tech products could be scalable because you can create copy cats but expertise is not because you have to increase salaries.

4. Can your product be replicated to other countries,target audiences or different income earners?

5.Do you have a team of people who will advise on certain issues? Yes you’re skilled,smart and talented.But you need someone who understands and is competitively knowledgeable in communication to advise you on PR and marketing.you need someone who understands legal requirements in your area,someone who can tell you what capacity your finances hold.

6.Is your business formalized?

Apart from having a registered business you’re required to have a business permit and be a consistent tax payer.
Yes,maybe you’re not making great profit and you’re required to remmit tax returns and you  choose to ignore.
Remember this will not only increase your tax penalties but also question your dilligence as a partner.

7.What does the future financial performance of the product look like?

To know this you will need  to constantly be aware of your financial progress and how your product is perfoming.Doing this will help you budget,recognize problems and opportunities, reevaluate  strengths, competiton and even work on your goals

8. Is one of the founders running the business full time ?

This emphasizes on your seriousness because your business is nolonger just a hobby.

9.Are you passionate about building the brand as a business?

10. Is your business area crowded?

11. Can your product surpass the test of time?

will someone still be using your product five years from now?how about the future generation.

12.Do you understand the different kinds of investors and which one your business needs?

is it a bank which will give you a loan only if you’re already a client with a history,is it an angel who is ready to even mentor you and tskevtge journey with you,or is it the strict venture capitalist who wants to see returns as agreed and if its none of them can an online app or will you just talk to your mom about giving you a loan

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s