There are many ways in which you can raise funds for your business and almost all of them will require you to sit in a meeting and to convince someone why they should give you or loan you the funds for your business. A good friend of mine works for the lending company Sertant Capital, who specialize in lending money for equipment, and he has told me some terrible tales about people who are not prepared or worse, and they of course have ended up walking away without any money in their pocket, the last thing that any young business needs.
In reality the requirements are very simple in terms of what you need, and if you have a fundraising meeting then here is what you should be looking to provide.
Spending
The amount of money which you ask for should be based on the amount of money that you need and to figure this out, you must know what you are going to be spending that money on. This may sound very simple but there is a huge number of people who go into meetings like this without being able to give an accurate and detailed description of where the money is going. You cannot just say that you are going to allocate $5,000 to marketing for example, you need to talk about how, where and why. It is not out of the way for someone giving you money to wish to know how it will be spent.
Projections
Another key question here is going to be who will you be able to pay the lender back? Yet again a reasonable question to ask. In order to answer this well you need to understand the projections of your company over the next 5 years and the next 10 years. This is a key part of what you are trying to convince the lender of, because they want to know that their money is safe and that it is going to be coming back to them at some point. The last thing that anyone wants is to give or lend money to a business which won’t make it.
Negotiation
When it comes to negotiating repayment schedules, interest rates and the like, it will be vitally important for you that you have a clear understanding of what is a reasonable offer. This means that you have to get some advice beforehand, because if you are asking for something which is too high or which is laughable, ,then it will make you look unprofessional and that could seriously affect your chances of getting the funds which you are looking for.
Ultimately the key is to come prepared with your facts and your figures, you have to know everything about your business and you should also have a very clear idea of why you need the money and what exactly you will be using it for. Prepare and plan well if you truly want those funds.
