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You might have a great idea to kick start your business and have done all the research and learned the intricacies for an effective business management. But to put that idea into real shape you need an initial finance. A well financed venture has all the requisite funds to purchase the desired machinery or hire specific personnel. Raising capital for small business equipment financing or other needs could be a tiresome exercise unless you know how to approach investors. The initial step should be to prepare an effective business plan which should include all necessary details such as capital requirement, growth prospects and a brief description about the nature of business you want to pursue.
If you intend to raise your capital through a financial institution or your family and friends, it should be done professionally. Equipped with a detailed plan and suitable presentations you should try to impress them with the credibility and growth avenues associated with your project. Generally people don't like to lend their money out of respect or friendship, so try to impress them through your credibility. Pay back options such as if you intend to give them a share in profits or a partnership must be included in the proposal.
If you are planning to seek funds through banks, your credit worthiness plays a major role. Even if you have a good business plan, banks don't risk their money if you have a poor credit record. Moreover they consider small businesses risky so they might be reluctant to fund you. Therefore it is advisable to approach banks with a plan as how you intend to pay them back.
Another option to seek small business investors is through venture capitalists or angel investors. These are people who have money and are looking for suitable investment projects. Angel investors are no fools and they often conduct meetings to explore your project idea intensively. You need present your business plan to them with revenue models and elaborate presentations such that they feel confident about putting their money in your proposal. Moreover if you can show them an exit route after a fixed period of time, they would feel happy to invest in you start up venture.
You can reach such start up business investors through their websites, investment networks, business journal etc. Another medium could be through investment matching websites. These are specific web platforms that have suitable investors listed on their portal. They match your requirements with the listed capitalists and present you with related contact information. In many cases angel investors can contact you directly by reading your proposal posted online. It is a very convenient and reliable medium to approach venture capitalists.
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