Melbourne start-ups face many challenges but perhaps nothing else in this list is more daunting to most founders than raising money. But what can you do, you need funds when you’re starting a business and possibly more when looking to expand. Most of the time, using personal savings isn’t an option and you’d rather ask from lenders or investors than from family and friends. Money, after all, can be a sensitive issue and you want to avoid that in your circle.
In raising business funding, making sacrifices isn’t unusual – and so is making mistakes. However, if you are not open to fine-tuning your strategy, you will just find yourself back in rejection zone. Below are five of the most common moves business founders make that earn them the proverbial ‘no’ and ways to possibly make investors finally say ‘yes’.
- Business valuation isn’t exact science but you need the most credible judgment for investors to consider. Similarly, there’s also the trap of overestimating profit. Sure you want to impress investors but you do not want to disappoint them, too, by raising the bar so high and failing. Seek the help of your bookkeeper Melbourne or any reliable financial expert to ensure the figures you present are backed up by facts.
- Not knowing when to press on and when to stop. Raising business funds is much like relationships, there are investors out to test your patience and while some would advise to give it your all, it’s wiser to know when to say yes and when to move on. The trick is to be prepared. Have someone in your team ready to take on your tasks in case the investor requests for a sudden meet up. Also, if you have been wooing one for a considerable time and the answer is still no, devote your efforts to the next on your list.
- Not getting professional advice. There’s art in raising business funds and sometimes, you need a mentor to improve your chances. Build a network of people who can give you expert advice. Finance professionals like your accountant or bookkeeper Melbourne can change much of your perspective on this endeavour. Talk to founders who were successful in raising business funding, but make sure their triumphs are recent for fresh and highly relevant advice.