WHY INVESTORS WON’T INVEST IN YOUR BUSINESS (1)

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why investors wont invest in your business

It is the dream of every entrepreneur, especially start-ups to have people invest in their business. As a business grows, it would get to a point where investors would come to access it with the aim of investing. Actually, having investors pull their resources to invest in your business is a very big step to business growth; it also a positive sign of how valuable your business is.

However, attracting investors isn’t magnetic neither is it as simple as it sounds. Remember, investors are shrewd personnel; they are savvy businessmen who are also looking for good ROI and not interested in experimenting. I must stress this, ‘investors are not likely to invest into business ideas; this is because ideas are cheap, unproven, everybody has one, therefore they are not worth-pursuing’. Investors wants something that is already structured and working. In the light of this, let’s take look at reasons investors won’t be attracted to investing in your business:

  • Your business growth potential

Financing start-ups is seen by most investors as gamble rather than doing business. This is because the chances of succeeding or growing are bleak. You must understand that investors are very result-driven; they look out for returns over their investments (ROI). In other words, investors are interested in businesses with growth potential; businesses that would keep yielding revenues and incomes, at the same time expanding in all areas. As a matter of fact, investors have a stake in the businesses they invest in, so they wouldn’t want to lose money. It is often said,“If your business can’t benefit a paying audience (customers), then it isn’t a place to invest in an investor’s eyes”.

Moreso, lack of interest from (smaller) investors like family, friends, customers, banks, etc is a bad sign and can dissuade potential big investors. Therefore, check carefully for factors that would determine the growth potential of your business and begin to implement them, so that your business can attract potential investors; else no one would like to invest in your business.

  • Your business track record
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Like I said earlier, investors are not interested in mere ideas but want to see working plans. Investors come for serious business and one of the ways they know this is learning about your business track records. Your business track record entails your business plans, budget, achievements, business structure and model, revenue stream, challenges and how you overcame them, strengths and weaknesses of your business. If you can’t provide a workable record of your business, you can as well be losing a potential big investor whose investment can take your business to the next level. In truth, one of the factors that would determine your business growth potential is your business track records.

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Your Personality

A strong personality is key to impressing investors and showing them you know what you want and what you are doing. As an entrepreneur and the owner of your business, you are firstly important to investors than your business; they would want to see you take charge. They want to see you as the leader of your business, someone with a leadership personality that can be entrusted to move the business forward. Investors are really interested in smart, savvy, bold and courageous business owner who ooze with confidence and are savoir-faire.

However, you must be careful such that your confidence is not taken for arrogance, especially when meeting your investor for the first time. Nobody likes an arrogant personality; in as much as you know what to say, give investors room to talk. Let them have a positive perspective about you and ensure they win your trust. A very weak personality would deter investors from you, hence, they would not invest in your business.

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