Don't Get Thrown

Don't Get Thrown Off by Questions 

Before attending the meeting, put yourself in the investors place. Think about the questions you would want ask: how large is your target market, who are your competitors, why is your product better than your competitors, how much money have you made, what are you growth plans? Also be prepared to supply alternate strategies.  If an investor doesn’t agree, for example, with your marketing strategy, have another answer on the back burner. 

When an investor has questions, make sure you answer them in a calm and collected manner. If they ask a question during the presentation, make sure you answer it as completely as possible. It can be tempting to brush through the answer to keep on track with your pitch, but it is important to remember that your relationship with this person is likely to be long-term; therefore your communication will be important.

4. Don't Paint an Unrealistic Picture

Just because you think the investor is looking for the next HootSuite, Lulu Lemon or Jim Pattison doesn’t mean that you should paint an unrealistic picture of where your business will be in 5 years. Be realistic and tell the investor how they are going to earn their money back and more, and in what timeframe.  

Add credibility to these facts by identifying your rivals and explaining your competitive strategy. 

5. Don't Think Short Term 

Don’t think about getting just enough cash to get you through the next 12 to 24 months, think about your long term plans. Want to reach 500,000 downloads of your mobile app? Want to sign a big new distribution deal? Want to hire a new marketing director to raise your awareness? Plan achievable milestones and aim for them. It’s better to raise more money than you need than too little.  And it will make the investment feel more attractive. 

Don't Contact

Here are 10 mistakes every small business owner should avoid when pitching to investors:

1. Don't Contact Every Investor you Know 

When looking for an investor, do your research. Not all investors are interested in every type of business, and not all investors are willing to invest the same amount of money. Talk to your friends, your connections, industry association, local Chamber of Commerce, accountant and lawyer.  Ask them for recommendations of investors and then find out everything you can about them.  Find out what types of companies they have invested in previously and at what stage of business. Generally this type of information can be found by the investor’s website, but you can also make use of social media platforms like LinkedIn and Twitter to see who they are talking about and who they are talking to.  

 

Once you have completed this research, target the one or two investors who you think best fit your business. This research will save you time from pitching to investors who are not interested, and will help to demonstrate that you have done your due diligence. 

2. Don't Cause Death by PowerPoint 

Find the right balance between providing enough information to interest investors, but not so much so that the investors get bored and have little time for questions. If you’vebeen given an hour to present to an investor, create enough slides to take you up to the 30 minute point and then 30 minutes for questions and answers. This should be approximately 12 to 15 slides.

 

And it’s not just about the number of slides. Make the slides visual as well as factual.  Include results from surveys, product tests and provide any client quotes or insights you have gained. If you have a product or prototype, make sure it’s fully charged and ready to demonstrate to the investor. If you can hand out samples, do it, everyone likes free stuff.

3. Don't Get Thrown Off by Questions 

Before attending the meeting, put yourself in the investors place. Think about the questions you would want ask: how large is your target market, who are your competitors, why is your product better than your competitors, how much money have you made, what are you growth plans? Also be prepared to supply alternate strategies.  If an investor doesn’t agree, for example, with your marketing strategy, have another answer on the back burner. 

Don’t Get Carried Away

Don’t Get Carried Away Talking About the Product

Both you and the investor are there for one thing.  Money.  By agreeing to meet with you the investor is assuming that your business is viable. Of course you should spend the first few minutes explaining the product or service that you supply, but your meeting should be focussed on the financial opportunity. Spend time talking about how much money you are seeking, the percentage of the business that will represent, the number of investors you would allow and specifically what you intend to spend it on. An interested investor will ask more about the product if they need to.

 7. Don’t Forget your Appearance

When attending pitch, make sure you look the part. This doesn’t have to mean a suit; but it does mean a clean professional outfit and groomed hair.  It also means you have to be aware of your body language. Make sure you maintain eye contact. Don’t wring your hands or put them in your pockets.  Don’t fidget from one foot to the other. The investor will make allowances for nerves, but fidget too much and you look like you’re hiding something.

8. Don’t Talk in Acronyms and Don’t Read a Script

Your presentation should be clear and concise. Don’t use acronyms the investor may not have heard of. Don’t use bad language. And don’t read off cue cards or the presentation. Instead present yourself as passionate and enthusiastic. Communicate what your idea is, why you think it’s great, and why it will be a financial success. Remember though, there’s a fine line to being opening enthusiastic and coming across as a slick salesman. Find the right balance.

9. Don’t Forget to Provide an Out

Show the investor how they’re going to make money. Provide one to three year projections. Investors don’t want to be your partner for life; they want to make their money and get out. Whether that’s selling to another company, going public or letting you stand on your own two feet. 

10. Don’t Forget to Seal the Deal

So the pitch went well, you felt like you connected well with the investor, now you need to close the deal. Follow up with a phone call after the pitch. Ask the investor if they have any further questions or concerns you can help with. Ask outright if they are looking to invest. If they are, schedule a second meeting.

 

Be prepared to hammer out the details quickly and efficiently. The longer you take to respond to questions or requests for information, the less likely the deal will be completed. Remember, investors are not only looking at your business, but many others, and if one of those is quicker or smarter in supplying details, your deal will be replaced by someone else.

Before you Seek Investment, Get your Business Plan Reviewed

Looking to approach an investor but feel like your business plan may need tuning up? Make an appointment with one of our business advisors who can objectively review your plan, providing feedback and resources to help you for your presentation to potential lenders or investors. 

Don't Contact

The art to the perfect pitch is to know what you are selling and to sell it well.  Looking for investment can be stressful and time consuming; but the more prepared you are, the quicker and more easily a deal can be done.  

Here are 10 mistakes every small business owner should avoid when pitching to investors:

1. Don't Contact Every Investor you Know 

When looking for an investor, do your research. Not all investors are interested in every type of business, and not all investors are willing to invest the same amount of money. Talk to your friends, your connections, industry association, local Chamber of Commerce, accountant and lawyer.  Ask them for recommendations of investors and then find out everything you can about them.  Find out what types of companies they have invested in previously and at what stage of business. Generally this type of information can be found by the investor’s website, but you can also make use of social media platforms like LinkedIn and Twitter to see who they are talking about and who they are talking to.  

 

Once you have completed this research, target the one or two investors who you think best fit your business. This research will save you time from pitching to investors who are not interested, and will help to demonstrate that you have done your due diligence. 

2. Don't Cause Death by PowerPoint 

Find the right balance between providing enough information to interest investors, but not so much so that the investors get bored and have little time for questions. If you’vebeen given an hour to present to an investor, create enough slides to take you up to the 30 minute point and then 30 minutes for questions and answers. This should be approximately 12 to 15 slides.

 

And it’s not just about the number of slides. Make the slides visual as well as factual.  Include results from surveys, product tests and provide any client quotes or insights you have gained. If you have a product or prototype, make sure it’s fully charged and ready to demonstrate to the investor. If you can hand out samples, do it, everyone likes free stuff.

Employment Incentives

Employment Incentives

• Hiring Credits for Small Business: This popular program has been extended for one more year, following an investment of $205 million. As outlined in our previous article by Gabrielle Loren on the program, this credit is available to small businesses who increased their Employment Insurance premiums in 2011 over 2010 and whose premiums were under $10,000.
   
• Summer Company Program: This summer program, which provides financial support to students who start a business while still in school, will be one of the benefactors of the Youth Employment Strategy’s additional funding of $50 million over two years.
   
• Industrial Research and Development Internship: This national internship program, that links Canadian businesses with graduate students for research placements, has been provided $14 million over two years to specifically link science and business graduates with businesses.
   
• Opportunities Fund: If you are a business who employs people with a disability or you are a business owner who has a disability you could receive funding through this labour market opportunities fund. Budget 2012 has pledged to invest $30 million over a three year period. 

Filling the Skills Shortage

To help fill the growing skills shortage, the government signalled that it will support changes to help improve foreign credential recognition.  It will work with provinces and territories to identify the next set of target occupations, and help integrate immigrants in the Canadian labour market. This includes:

 

• Provide further incentives to retain educated and experienced talent through the Canadian Experience Class.
   
• Introduce a new immigration stream to facilitate the entry of skilled tradespersons.
   
• Target, through the Business Immigration Program, more active investment in Canadian growth companies and more innovative entrepreneurs.
   
• Improve the Provincial Nominee Program by focusing on economic immigration streams in order to respond quickly to regional labour market demand.
   
• To meet regional employer demand and improve the responsiveness of the Temporary Foreign Worker Program, the government has reduced the paper burden on you as the employer and shortened processing times. 

Other Commitments

• Scientific Research and Experimental Development (SR&ED) Program will change from providing indirect support via tax credits, to dedicating $1.1 billion of direct support over the next five years.
   
• Forestry industry will also receive $105 million over the next two years to support innovation and market development.
   
• EI premiums will become more predictable with a pledge to limit rate increases to 5 cents each year.
   
• The pledge to reduce red tape through the “One-for-One” rule and reduce the tax compliance burden for businesses was reinforced.

Reciprocal Links

Reciprocal Links

While the odd reciprocal link ("Link to me and I'll link to you") does not hurt, multiple deep site links (like in your blog or case studies) raise alarm bells that agreements or incentives are in place. 

The problem arose when search engines considered any incoming links as a ‘vote’ for that site. When webmasters realized that they could simply ‘trade’ votes with each other and improve each other's standing in the SERPs, reciprocal links became over used and defeated the purpose of the algorithm. 

 

Since then search engine algorithms have become more sophisticated. Incoming links are now judged by the relevancy, quality of the linked site and the anchor text (words to which the link is tagged). It is therefore wise to be careful of directories who promise value back to your site for exchange of a link on your site, as this could harm the rankings of your own site.

There are many myths and misconception out there when it comes to SEO. There are also many companies out there looking to take advantage of these. When looking at improving your website it is important to source advice from a reputable source. Whether that is a family member in the business, a consultant, a course or a book. 

Where to Look for Help

Small Business BC holds a regular seminar on Measuring the Success of Your Web Site – Web Analytics and SEO presented by Vik Kumar of Iconic State. This seminar will help you understand more about your customer what keywords your customer’s are using to access your website and the importance of SEO.

 

If you are interested in a more one-to-one approach to diagnose the specific issues of your site, check out our Ask the Web Expert consultancy.  Run quarterly, this service provides you access to a web consultant for 30 minutes to help you optimize your site.

 

There are also a number of blogs to monitor which can help keep you up to date on the latest happenings of SEO including SEO Moz and