One of the main struggles that new start-ups face in their first years is gaining enough money to get started or to expand. Raising money may seem like a mountain to climb without the help of an investor. To grow from a small start-up to a full scale company, funding can be pivotal to stay on top of cash flow and avoid insolvency.

There are several ways to make your business attractive to investors, and in this guide we detail some easy steps that start-ups can take in order to secure as much funding as possible.

Do your Research

To prove to investors that your business is being run by an expert, you should learn as much as you can about your market. This includes demographics, trends, and your competition. This proves to investors that you know what you are talking about.

To avoid being blindsided by a question from an investor, be sure to keep up with the news in your industry, and keep tabs on your competition as well. It can be worth reviewing this information before fundraising.

Keep direct costs as low as possible

“Minimising direct costs makes sure your profit is as high as it can be,” explains Andrew Speer, Commercial Director at Tudor Lodge Digital, a marketing agency.”

“This is exactly what investors want to see. A good target is to get your documented profits above the 30% level. This is sure to attract the interest of investors.”

“Keeping direct costs low without sacrificing the quality of your products can seem difficult, but it can be an integral part of your business plan. Sometimes this can mean going back to the drawing board and restructuring a product, which can cost you time, but it is often worth it in the long run.”

Have a thorough plan

Make sure your plan is as thorough and actionable as it can possibly be. The more potential for profit your business has, the higher the investment you receive will likely be. The best way to demonstrate this potential is by a strategic, realistic business plan.

Your plan should bring in as much profit as it can while still being realistic. Investors will be less likely to invest in businesses who present them with plans that do not align with market realities.

Push to exceed your goals

You want to show investors that your company has the potential to grow. Exceeding your goals can be fantastic evidence that your business is a safe place for people to invest. This is particularly important in the year before you start approaching investors.

Keep detailed accounts

Well-audited accounts function as proof to investors that your company will perform as promised. They can lend credibility to your future plans, and serve as a catalogue of victories.

When investors look at your business plan, your projected growth needs to seem realistic. This means you need to back up past successes with concrete evidence. It can help investors to feel safer giving you more valuable investments.