…continued from last week’s article and you can read the first part here
The Seven Key Attributes that Attracts Investors Funding
1. A Wealth Creating Entrepreneur
The first attribute of businesses that attract funding is that they are run by a wealth creator. A wealth creator is anyone with the ability to create wealth from scratch. And there are two attributes that make a wealth creator. The first is Personality and the second is skills. Personality in this case has nothing to do with whether you are an introvert or an extrovert. But has everything to do with possessing certain abilities that are attractive to wealth. There are six key abilities that make a Wealth-creator.
The first ability is a Positive Attitude. All wealth creators have a positive mental attitude. They see themselves, other people, and the world from a healthy perspective.
The second ability is clear Communication. All wealth creators are great communicators. They speak, write, and send clear messages that are simple and easy to assimilate. They also ask meaningful questions, listen to customer’s feedback, and are able to sell their ideas.
The third ability is Focus. All wealth creators are focused people. They created wealth through a prolonged focus on a worthwhile goal. Focus is critical for wealth creation and businesses that attract funding must have a sharp focus.
The fourth ability is Confidence. Confidence is proof of competence and all great entrepreneurs have Confidence, self-mastery, and a healthy self-esteem.
The fifth ability is Integrity. Integrity builds trust and trust is the bedrock of every business relationship. Thus businesses that attract funding are run by trustworthy and credible people.
The sixth ability is Resilience. Great entrepreneurs are all resilient people. Resilience is the ability to go through repeated setbacks without giving up. It is the bounce-back ability and bouncing out of setbacks quickly is critical for business success.
These are the six abilities that turn an entrepreneur into a wealth-creating personality. And investors are attracted to these kinds of entrepreneurs.
The second thing entrepreneurs must have to attract funding is skills. And there are three important skills necessary for creating wealth. The first is creativity or innovation skill. The second is relationship building skills. And the third is marketing and sales skills. These three skills are valuable because they can be used to create wealth from scratch. They are useful to help entrepreneurs bounce out of a negative situation or setback.
2. A Profitable Business Idea
A business that is based on a profitable business idea is attractive to investors. A Profitable business idea is an idea that solves a real problem in a new or unique way. That is this idea must fill a gap in the marketplace that is important to the target customers. And it must also solve the problem in a new or unique way. Profitable business ideas thus have two great characteristics. The first is the ability to close gaps in existing solutions. And the second is the ability to innovate on existing solutions.
These two characteristics are important because fundamentally human needs do not change. What change is the way and manner these needs are met. When you close a gap in the marketplace you help customers see what is no longer acceptable and what is missing in the market. And when you innovate upon existing solutions you show customers another way of solving their problems.
3. The Business Owner invested capital
No Investor wants to invest in a business that is lacking in the business owner’s own money. The reason for this is simple. Money goes where the heart goes. And if a business owner’s money is not in the business his heart is not there. Although many may claim that their lack of personal funding is due to the lack of money. But when you look closely you find that this is not true.
There are three truths present each time a business owner funding is missing in a business. The First is misplaced Priorities. Most people have the capital for funding their business tied up in personal possessions and stuff. The second is a lack of discipline. That is a lack of discipline to save and plan ahead. This is a big turnoff for investors. The third is a lack of high-income skills. This also means that the likelihood of this person succeeding in business is pretty slim. Whichever is the case for you a lack of business owner funding is not attractive to investors. To get the funding that you need you must invest in your own business and bring something to the table.
4. The Right Target Customer
The fourth attribute of a great business that attracts investors’ funding is the right target customers. The right target customer is any customer that has a problem your products or service can solve. And is willing to pay you and not any other person for it. The right customer is also that customer that is reachable, easily accessible, and aligned with your company’s goals and vision. Customers that create wealth has seven attributes that you must pay attention to. The first is that they have a problem. The second is that they are either dissatisfied with current solutions or unaware of existing solutions. The third is that they want to do something about the problem. The fourth is that they are open to trying your solution. The fifth is that they have the financial ability to take action if they like your solution. And the sixth is that they are ready to take Action Now. These six attributes must be present in your ideal customers if they are to create wealth for you. Investors are looking to fund businesses that have identified who the right customer is for them.
5. A Low to zero Customer acquisition cost
If a business spends all its money on acquiring customers, the business is on a financial treadmill. Customer acquisition cost is critical for business longevity and profits. And you need to get your Customer acquisition Cost below the Lifetime Value of the Customer. This means that you must create a system that helps you acquire customers cheaply and easily. To acquire customers cheaply you must have creative skills, communication skills, and relationship-building skills. These skills will help you reach your customers, influence them the right way and convince them that your product is worthy of their cash. Keeping your customer acquisition cost low is key to attracting the right kind of investors.
6. High–Profit Margin
Profit is the life wire of a business and a great profit margin is a magnet for investors. The purpose of profits however is not just to enrich you and your Investors. But to create more room to wow and delight your customers. For example, if I have a profit margin of N50, 000 and you have a profit margin of N5, 000. I can do more for my customers than you can. I can send my customers nice birthday presents or invite them and their friends over for dinner. All of these boost brand loyalty, repeat business, and automatic customer referrals. You in contrast can do little to create this kind of effect. This means that you will work three times as hard to get any leverage from your existing customers.
However, you can’t just increase your profits from thin air. You need a strategy to expand profit margins. To do this well you need to understand that there are two types of profit. The first is the real value profit and the second is the Perceived value profit. The real value profit is limited in scope as customers at some point will begin to compare you to other competitors. If you want to increase profit margins without resistance you must focus on increasing perceived value profit. This is where profit elasticity reside. And this is because the perceived value profit is manufactured from emotions and there are no real measurement criteria or limits. Thus increasing real value profits and perceived value profit is key to attracting investors.
The problem is while most people can increase real value profit only a few know how to increase perceived value profit. This is why the most valuable products are not necessarily the most profitable products.
To increase the perceived value profit you need to know what value means to your customer. You also need to know which area of your business or product is the most fascinating to your customers. Then you need to become the best in this area. And build a solid brand around it. Products with high perceived value will always carry the highest profit margins and these are the products that are the most attractive to investors
7. The Right Timing
Businesses like fruits have ripening times and seasons. And not all businesses are ripe for the market at the same time. Thus understanding the business you are in and the timing for that business is key to success. Investors will favor businesses whose time has come over those whose time is in the future. The key to knowing the right timing for your business is knowing when your consumers are the most receptive to your solution. The right timing will always meet the customers at the time when they are most ready to buy. And this timing can be influenced by the external environment. But it can also be manufactured through creative marketing. The key to attracting investor’s funds is not to enter businesses whose timing is far into the future. Especially if you do not have the financial stamina to withstand long years of drought. But to enter businesses whose timing is right. Because only then can you create wealth with speed.
These are the seven key attributes that attract investors’ funding.
The truth is there is no shortage of funds anywhere. There is only a shortage of businesses that have the attributes investors are looking for.
So now that you know what makes businesses attract Investors funding how then can you fund your business?
Let’s see your funding options.