The only two things you need to get a business start-up off the ground

A couple of weeks ago, I came across a business show called Be Your Own Boss. It’s essentially a much more friendly version of Dragon’s Den that aired a decade or so ago. Based in the UK, angel investor, Richard Reed reviews a couple of hundred businesses in various phases of start-up in a sort of trade show-esque set up – getting each to give him a quick and dirty sales pitch as he walks around.

From there he and his team select six business owners to talk further to in order to give just three a tiny bit of seed capital (around  £2000-5000) to see how much further the start-up team can progress in three months. At the end he’s usually found a gifted start-up that’s  done the work required and is ripe for further investment to give some further £30,000 funding to – although they never actually cover off what the start-up in question has to give in order to get that level of investment.

But there are several things that amaze me every time.

  1. How many business owners can’t actually articulate what it is they do and the benefits it provides for their clients easily or even in a way that someone not connected with the product can understand
  2. How many business owners, even when they’ve got someone who’s really interested in either doing business with them or funding their business, can’t actually get out of their own way and get what needs to be done, done. More often than not, this comes down to finding customers (you can read a previous blog on that here).

So why am I sharing this with you? It’s not just on TV that these issues exist. Over the years, Greg and I have had clients looking to invest in other businesses. And unfortunately, after taking a few meetings with people looking for investment they’ve come to us shaking their heads and bemoaning to how hard it really is to find something worth investing in.

Essentially those looking for funding have left the lion’s share of the work in the potential investor’s corner to figure out if it’s worth their money or not.

In short if you’re looking to have someone invest in your business, be prepared to do the work. Spend a goodly amount of time getting how you talk about what you do spot on – and that’s always from the perspective of the value and outcomes you provide for your customers and following on from that, how that would translate to the investor/purchaser.

And find yourself some customers who adore what you’re doing/proposing doing and sell, sell, sell. Focus just on that and you’ll be a long way to being the ideal ‘investee’.

Next blog post we’ll look at what investors and buyers look for when they’re considering your business as their next investment.

In the meantime, if you’re looking to invest in a business, get investment in your business or you’re looking to get your business ready for sale, we’d be delighted to talk you through what you need to know and do in greater detail. You can call Kerry on 6023 1700, drop us a note or connect with Kerry via LinkedIn.

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