If your business or unique business idea is short on financial muscle, then consider marketing it as an investment opportunity to private investors in Zimbabwe, or in the Diaspora. No matter what industry or sector you’re involved in (mining, Tourism, Manufacturing, service, retail etc), there is a niche of potential investors ready and willing to finance it, IF you can convince them that it’s worth while.
And if you’re like most Zimbabwean businesses, a major problem area is demonstrating your ideas as a safe and profitable investment – even once you’ve found the people with the money.
No doubt about it, getting investors or funding for a new business is no easy task, more so in Zimbabwe than in many other places. It takes research, perseverance, and a well thought through presentation. Investors, just like you investors don’t part with large amounts of their hard-earned money easily but there are a few things you MUST do, that will make your business more believable as a safe investment. Here are 3 Absolute MUSTS.
1) You MUST Invest your own money before you ask for anyone else’s. When a smart investors sees that you haven’t invested your own money into your so-called ‘guaranteed to make us rich’ business idea, it’s an automatic red flag. It’s simple logic – If YOU don’t believe enough to take the first financial risk, then why would I do it? Remember how Nigel Chanakira sold his house to start Kingdom Bank – he took a major personal risk that gave others much more confidence in how much he believed in his idea (and it paid off).
If you have invested, then show exactly how, how much and how the business benefited from your investment. If it’s benefited you to invest, it’s a lot more likely that it will benefit me too.
If you have no money at all, then you can certainly invest your time. Show the investor how you’ve personally invested months, even years of your own time. Value your time at a realistic money equivalent to give them an idea of how much your personal investment has been worth to the business. Most importantly, show them in concrete ways, how your investment has paid off in important ways. Once again, if it was worth your time, then it’s more likely to be worth my money. Invest first – put your own money/time where your mouth is.
2) You MUST Compliment Your Good Business Idea with a good team. Experienced business people know that despite the hype out there, a million dollar idea, is a bad idea in the hands of the wrong person. That’s why being able to show that you (and your team) are the best people to turn this business idea/ opportunity into something special is absolutely vital. In horse racing people bet on the jockey as much as the horse – same thing in business. If you can demonstrate how you are an excellent entrepreneur/ management team, it will often give investors MUCH greater confidence, even if the idea or opportunity isn’t ground breaking or more risky than they’d like. Think about it, wouldn’t you bet money on Richard Branson or Donald Trump even if you didn’t fully understand or agree with the business plan? Many people would. Take advantage of that. Highlight all relevant pass successes, qualifications, experience, skills that show your capacity to make their investment worth while.
3) You Must Prove Every Important Claim In Your Business Plan/ Presentation. Most business plans and investor presentations are full of unproven assumptions and wild claims of easy profitability – don’t make that mistake, investors are not idiots and they don’t believe what you say, simply because you say it. Go overboard in offering proof for all your important claims. Go out of your way to demonstrate
- Why the business is a real opportunity and not just a unique idea
- How you are so certain that your marketing/distribution/financial/Human resources/management strategy will work
- How they can be 100% certain the money will go where you say it will go
- How you know that your sales projections are realistic and accurate as possible.
- Why exactly your management team can deliver on the idea
- And so on.
Prove as much as you can – especially the things that are likely to be perceived as the greatest risk areas (this may differ from industry to industry or business to business). It demonstrates that you’re both well researched and more likely to diligently guard the investments you’re asking someone to make.
Whilst it’s true that Zimbabwe is ever improving, that’s not something that many people overseas can see or appreciate easily. The media still passes off stories (many greatly exaggerated) that scare off potential investors. Understand that all this means is that you will need to work a little harder and smarter to get private investors interested in your business or idea. This doesn’t change anything, success has always been the reward for those willing to go the extra mile where it counts. Nothing is impossible to him who believes.
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