Potential Investors and Business Etiquette

When trying to take your original concept, plan, or product and turn it into a profitable resource for you and your family to benefit from, progressing can be extremely difficult without the financial backing or capital money to help you get started. Many people choose to pursue potential investors that might be willing to provide them with the start-up money for a percentage of the profits in return. Knowing how to seek out and convince such potential investors that investing in your idea will be profitable for both of you can be an extremely difficult task.

Having a clear idea of exactly what your concept or product is and exactly how it will be used or marketed is the first step. When providing any potential investor with a summary of your basic idea, you want to sound as if you already have everything figured out. If you seem unsure of your success or sound as if you have neglected to think about certain aspects of your project, your investor might not feel very confident entrusting his capital earnings towards your investment.


The Art of Financial Sense - Knowing Your Limits

Another thing to keep in mind is that having a clear, concise idea and direction will not always be enough. Through graphs, pictures, charts, and any other visual aids that you feel might be prudent to your presentation, you can show would-be investors just how much time and thought you have already put into your idea. Although you want to sound earnest and natural when pitching your idea, running through your presentation a couple of times in the mirror or to a friend or relative is a good way to gain confidence while working out any kinks that might exist.

Be prepared with a rough estimate of your expenditures that you plan for your investor to cover. Convincing a person to loan out any amount of money, business-related or personal, will not be easy without a basic outline of the costs along with the returns on their investment. Take some time to research and add up the pricing of everything you might need - always warn your potential investor that the prices are simply estimates and will likely not be exact, as failure to do so will likely lead to legal issues in the future.

Choosing the Right Visuals for your Presentation

The Essentials:

• Planning - Even if you lack some or all of the necessary funding to initiate your plan, treat it as if you already did. Research and learn everything there is to know about your product. Be prepared with a basic understanding of the popular market and appropriate advertising, competition, as well as any technology or other service that might associate with your product.
• Presentation - Formulate your concept through notes and research that will eventually translate into a formal presentation that will cover all important aspects. Use bullet points or numbering on your final presentation documents to create a natural flow of dialogue and explanation.  
• Financing - Once you have sufficient capital money to begin taking action, be sure to carefully monitor and record all of your expenditures. Take advantage of your ingenuity and find ways to lower your expenses. If you are working with one or multiple investors, this can prove extremely important due to the fact that any financial loss will be shared among multiple people.
• Finalization -   The outcome of your venture will actually rely mostly on the decisions you made in the earliest stages of development. Depending on the initial agreements made with your investor(s), you might be able to become the sole beneficiary of your business after an allotted period of time. If you strongly believe that your concept or product will produce substantial amounts of residual income, look towards your long-term situation before making any decisions.  

Creating an LLC or Becoming Incorporated