2 min read Building Your Business and Finding Funding.
Do you have a brilliant idea and feel as if you’re ready to hit the ground running? Are you ready to build your company, source the necessary funding, and start pulling in revenue?
If you’re like the many entrepreneurs I have met, the answer to these questions is an astounding yes! But there is just one problem- you’re not sure where to start. Not to worry. I have laid out the key concepts behind building a successful company and securing an investor below.
The first step you need to take is simply to keep reading.
Building Your Business
The key to building a successful business is to build three businesses, not one. When I was growing up, they had a saying in business. There’s the product you market, the product you sell, and the product that makes money. An example was McDonald’s which marketed the Big Mac. When you bought a meal they would ask- “Want some fries with that?” And yet, they made almost all of their profit off the coke drinks. At the time it was rumored to be around a 90% profit margin.
In today’s business you need three products:
- The product you market – your brand, your mantra, your flagship product that everyone wants.
- A product that generates cash—this is basically a service business that pays the bills now.
- The product you build to sell as a business unit later–is typically a SaaS business model that provides recurring revenue.
Why go through all the trouble of building three businesses instead of one? Because it can be hard to build a SaaS business when the only thing you are building/selling is the SaaS product. Consider adding more products around it to make the business easier to grow.
Securing An Investor
There are several basic rules of fundraising that all startups should keep in mind. Below are the top five in my opinion.
- Know your investors—it’s important to know what kind of investor you are looking for, and what those investors want to see in your deal. Many startups fail to understand what the investors are looking for and end up without a follow-up meeting after the pitch.
- Educate your investors–after you pitch the investor it’s important to educate the investor through updates about your deal. It’s often the case the investor is unfamiliar with your application or space.
- Build trust—demonstrate that you can be trusted by showing examples of how you’ve performed in the past.
- Respect your investors—show respect to the investor and don’t take their time and advice for granted. When investors see their feedback and advice is not followed up, they tend to turn their attention elsewhere.
- Focus on current supporters—make sure you keep your current investor and investor prospects updated on your startup. If you don’t articulate progress in your deal, the investor will most likely not know.
Now you have a starting place to build your business and secure funding. What are you waiting for? It’s time to hit the ground running.
Feel free to try out our calculators and contact us if you would like to discuss your fundraise: https://www.startupfundingespresso.com/calculators/
Hall T. Martin is the founder and CEO of the TEN Capital Network. TEN Capital has been connecting startups with investors for over ten years. You can connect with Hall about fundraising, business growth, and emerging technologies via LinkedIn or email: hallmartin@tencapital.group
