The Key to Getting Someone to Invest in Your Small Business
Archives: Daily Issues
Issue #2600
- WEALTHY: 6 steps to winning personal investors (Paul Lawrence)
- HEALTHY: Prevent colds with 3 herbs and vitamins (Dr. Al Sears)
- WISE: William Arthur Ward’s 4 steps to achievement
ALSO IN THIS ISSUE:
- An easy method for increasing sales (Suzanne Richardson)
- It’s Fun to Know… about copyrighting your Elvis sighting
- Add “transmute” to your vocabulary
== Highly Recommended ==
Cash from the Ash
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“Four steps to achievement: Plan purposefully. Prepare prayerfully. Proceed positively. Pursue persistently.”
William Arthur Ward
The Key to Getting Someone to Invest in Your Small Business
In this tough economy, you might be thinking that it’s impossible to find the capital to start a small business.
If you’re hoping to get a business loan from a bank, you’re probably right. But if you’re thinking of getting money from a private investor, nothing is further from the truth.
The fact is that millions of people have money to invest. And they want to get a decent return on their investments. With interest rates so low on CDs and Treasury notes, they are more willing than ever to consider alternatives.
Of course, there’s a catch. In order to get a private investor to consider your small business, you must convince him that the opportunity is sound, with little risk of failure. They way to do it is with a well-thought-out, written business plan that’s loaded with specific numbers and examples.
Here are the basics of a plan that has an excellent chance of attracting the start-up capital you need…
Step 1: Demonstrate the profit potential of the business.
The best way to prove that your business idea is viable is to test it in the marketplace with what Michael Masterson calls “a working model.” That gives you actual numbers to work with to estimate anticipated revenues and expenses.
If it’s not possible to test your product/service on a small scale, you’ll have to do some research to come up with numbers from similar businesses that are already successful in the market you’re entering.
Step 2: Show that there is a substantial – and growing – demand for your product/service.
Use statistics – from census reports, economic reports, the Internet, and relevant news articles – to illustrate the need for your product/service.
If, for example, you want to get a new catering business funded, you might write something like this: “The National Catering Association estimates that, in the past year alone, more than $50 million was spent on catering in our target area. Despite the sluggish economy, the number of events that are traditionally catered – including weddings, graduations, and bar mitzvahs – is not expected to decrease. However, people are looking to keep expenditures down. Which means that our discount pricing and quality service should give our business a strong competitive edge.”
Step 3: Lay out your marketing plan.
If you were able to test a “working model” of your business idea, there’s at least one marketing channel that has already proven to be effective for you. Include your test numbers in this part of the marketing plan, as well as projections for additional channels you intend to try.
For example: “We have done preliminary tests with pay-per-click (PPC) ads on Google, and have determined that, using the keywords we’ve already identified, we can generate click-throughs for $8.10 each. It takes an average of 12 click-throughs to secure one new client, which means that we can expect each new client generated through PPC to cost $97.20. The average gross revenue for each new catering client is anticipated to be $800, which gives us a substantial profit.
“We will expand our PPC campaign by testing additional keyword ads. We’ve also been tracking our competitors’ marketing efforts, and have found that they consistently advertise in the announcement section of the local newspaper. We believe this to be a promising channel to test.”
Step 4: Specify your strengths.
Write about your actual experience in this particular type of business. If you don’t have that, explain how the experience you do have qualifies you to run one. Then add anything else that will convince your prospective investor that you will be successful. This could include your educational background, as well as personal achievements that demonstrate you have the intelligence, determination, and desire to make the business work.
When I launched my instructional dance video business, I was looking for investors. I had already produced a homemade video and had sold a few through classified ads, so I had a working model. But I really had no experience in the video marketing business. So in my business plan, I emphasized the success of my private dance instruction business. I made a case that the same skills that made me a successful dance teacher in person would come across on video… that I would be able to teach people to dance in a way that they would like and understand.
Step 5: Outline how the business will function.
You don’t need to go into too much detail here, but you’ve got show your prospective investor that you’ve thought it through. If you’ll be selling physical products, explain how they will be procured, stored, delivered, etc. If you’re starting a service business, describe, in general terms, how the customer will be taken care of.
Step 6: Write out a budget.
Using the actual and projected numbers from Step 1 and Step 3, come up with a monthly budget for your first year in business and annual budgets for the next two years. Be sure to include exactly how and when the investor will be paid.
As you can see, the kind of business plan you use to secure private funding is somewhat different from the formal plan that a bank or venture capitalist is likely to require. Since you probably know your prospective investor, you can make it more personal. You can also make it more persuasive by using a little creativity.
Here’s what I mean…
Many years ago, when I wanted to start a vending machine company and didn’t have any capital, I pitched my idea to a former co-worker. In my business plan, I provided facts and figures indicating that there was a strong potential market for this service. But he was skeptical. So, to show him what those facts and figures really meant, I took him on a drive around town. (I had, of course, scouted it out ahead of time.)
First, I took him to several business locations that had vending machines onsite. We chatted up employees, and they told us that the machines had been around for a while and were very popular with the people who worked there, as well as their customers. Then, to make the case that there was room for more vending machines in the area, I took him to similar locations – lots of them – that didn’t have any.
My investor was convinced. He had seen for himself that the vending machine business was working for others, and that there was room in the market for mine. He gave me the capital I needed to get started… and we both ended up doing very well.
[Ed. Note: Paul Lawrence is an entrepreneur and author who's started over a dozen profitable small businesses. He publishes the "Street Smart Business Program," which is filled with the kind of practical advice you'd never get from a typical business college. For more information on the program, click here.
One of the best ways to ensure that your business will succeed? Master the art of selling. Now you can spend two days with one of the top Internet sales experts in the world. Find out how here.]
Master Mega-Profit Marketing from the Legend of Persuasion
What would you give to take driving lessons from Richard Petty? Voice lessons from Pavarotti? Art lessons from Picasso?
When it comes to direct response marketing, Bob Bly is a legend. He knows just what to do – and what to say – to make it very easy for people to buy from you online. Mastering his techniques can take your Internet sales from mediocre to gangbusters!
In an exclusive two-day event, this aficionado of persuasion will take a very intimate group of ETR readers and “brain dump” on them – teaching you everything you need to do (and not do) to make breathtaking profits online. It’s an intense, hands-on workshop like no other. And it’s designed specifically to substantially increase the success of those who sell online.
If selling more online matters to you, here’s how you can do it better…
Why You Must Send a Confirmation E-mail
You market like a maniac. You get a customer to buy. You send her the product.
The end, right?
No way.
If you stop interacting with your customers as soon as they send you their credit card information, you are missing out on tons of future sales.
You see, an existing customer – someone who’s already pulled the trigger and made a purchase – is much more valuable to you than a no-name prospect. As marketing expert Clayton Makepeace says, “Making secondary sales to existing customers is one of the cheapest and lowest risk actions a company can take. Response on promotions sent to existing customers is usually six to eight times higher (sometimes more) than promotions sent to cold prospects. Average sale is substantially higher, too – sometimes as much as two to three times higher.”
So what’s a good first step toward building that long-term relationship?
One simple strategy is to send a confirmation or welcome e-mail after every transaction with a customer or prospect. For example, if Sally Jane signs up for your newsletter or buys your cake-baking kit – you should introduce her to your business and/or remind her of the benefits of the product or service she just purchased.
A confirmation e-mail confirms a transaction. (“Thank you for purchasing our Training Your Pet at Home Manual!”) A welcome e-mail establishes the foundation of an ongoing relationship with the customer and reinforces in his mind the fact that he just made a good decision.
Says Internet marketing expert David Cross, “Businesses that send confirmation and welcome e-mails in the first few days of a relationship with a new customer are consistently able to increase sales, the number of their future e-mails that are opened, and the number of links people click on inside those e-mails.”
[Ed. Note: Writing confirmation and welcome e-mails is one easy way to amp up your Internet revenues. For more strategies, join "America's top copywriter" Bob Bly in New York City this March. He'll be revealing his best secrets to selling on the Web to you and an elite group of other future moneymakers. Get the details here... but hurry. The Early Bird discount ends soon.]
Boost Your Body’s Defenses to Fight the Common Cold
By Al Sears, MD
Feel a cold coming on? You may want to stay away from the pharmacy.
Over-the-counter drugs only relieve symptoms. They don’t get rid of the viral infection causing them.
Instead of relying on over-the-counter drugs, keep yourself from getting sick in the first place. A lot of people think there is nothing you can do to stave off the common cold. But in my practice, we’ve proven that’s not true. You can, for example:
• Take vitamin C. You should take 500 mg a day of this potent antioxidant consistently. If you feel a cold coming on, increase that to 1,000 mg. This old standby really is one of your body’s best immune defenses – if you take enough. The recommended daily allowance of 60 mg a day will do nothing.
• Use Echinacea, an herb that Native Americans have been using for centuries. While it’s a strong immune booster, it’s best not to take it regularly. Drink one to two cups of Echinacea tea a day during cold and flu season. You can also take Echinacea capsules, 500 mg a day – but I prefer the tea.
• Try Goldenseal, another Native American plant. This is a strong bacterial fighter, including the bacteria that cause strep throat. You can find powdered Goldenseal in capsule form at most health food stores. Gargle a solution of Goldenseal and water at the first sign of a sore throat. Use 100 mg three times a day.
[Ed. Note: Dr. Sears is a practicing physician and the author of The Doctor's Heart Cure. He is also a nutritional expert, a fitness expert, and is certified by the American Board of Anti-Aging Medicine. Find Dr. Sears's practical solutions and get immediate access to more than 500 of his articles by visiting www.alsearsmd.com.
For more expert recommendations on how to feel better and live longer, check out ETR's FREE natural health newsletter.]
It’s Fun to Know: Copyrighting Your Elvis Sighting
Government bureaucrats are nothing if not thorough. Case in point: There’s an entry on the FAQ page of the United States Copyright Office that deals with the question of copyrighting your Elvis sighting.
Turns out you can’t do it, because copyright law doesn’t protect sightings or the subjects of photographs. But you can copyright your photo of an incognito Elvis for a small fee.
No word yet from the copyright office about copyrighting your Bigfoot sightings.
== Highly Recommended ==
Are You Embarrassed of What You Do for a Living – or Just Tired of Doing It?
One woman was both, and while her “acquaintances” at a dinner party snickered and poked fun, she had the last laugh. In as little as two weeks she started a new business for less than $99, soon had to hire additional employees to handle the work, and now lives a life without money worries of any kind.
Here’s how you can do the same, even easier and faster than she did.
Word to the Wise: Transmute
To “transmute” (trans-MYOOT) – from the Latin for “to change utterly” – is to transform from one nature, form, substance, or state into another.
Example (as used by Lena Lencek and Gideon Bosker in The Beach: The History of Paradise on Earth): “Sand that once was rock becomes rock once again as it slowly sediments and compresses into layers of sandstone, which, in turn, transmute into sand.”
[Ed. Note: Become a more persuasive writer and speaker ... build your self-confidence and intellect ... increase your attractiveness to others ... just by spending 10 VERY enjoyable minutes a day with ETR's new Words to the Wise CD Library.]
Copyright ETR, LLC, 2009
Copyright ETR, LLC, 2009
I want to start a small coffee cum fruit garden in Nepal, I have 1.5 hectare of fertile land in Nepal. The place is beautiful for snow covered mountains views and bio-diversity. Organic farming can easily be done. The place is near to Highway road. There is a potentiality of producing other medicinal and aromatic plant species.In this way the garden works as a resort in future.I am seeking a partner for investment, please arrange this.