Common Mistakes By Business Owners seeking Sale/Investment


Having a sound financial plan is the epitome of success in the world of business. A great pitch can go a long way. New business owners tend to make some common mistakes that can have a negative effect on their growth. Your ideas can be amazing but until and unless you have a structured plan, investors will not find your venture attractive.

I have compiled a list of common mistakes that you should try your best to avoid if you are a business owner seeking venture financing or sale.

Lack of Planning

When it comes to pitching your idea to an investor, make sure that you have everything sorted out. You need to be prepared as well as know what you want. The most common mistake entrepreneurs make while pitching their idea is a lack of preparation and failure of coming up with a sound plan.

You should have an answer for every question and the ability to guide your audience to your final goal. You need to prepare enough to know exactly what you want to do and how. No one wants to invest in a business that does not have a structured plan.

Remember:

Your business plan should validate your vision statement. A basic structure consists of an overview of your company, a financial model, offerings, operational strategy, and marketing strategy.

Unattainable Sales Forecast

Most new business owners try to offer gold when they cannot even come up with coal. They make a plan which is solely based on conjectures. This technique sets up a lot of red flags and can easily deter creditors as well as investors.

You should always make predictions about short term and long term sales forecasts, as accurately as possible. This will not only help your business grow but also turn you into a credible candidate: an entrepreneur that makes realistic statements and who can effectively convert prospects into sales.

Not Talking About Potential Risks

No plan is foolproof, and even the best businesses can fail. Risks are always there and you need to make sure that you inform the investor about the potential risks. A brilliant entrepreneur should always know about the risks and should have ample knowledge of how to mitigate them. You need to have an answer to difficult questions like, are there any product liability risks? Or how do you plan on minimizing the risks?

Not Doing Your Homework

Walking into a meeting with a potential investor or client and not knowing anything about their background or what they are looking for is how you help destroy your own business. To know how to please and wow people, you need to conduct ample research on them.

There is no way you can win a game without first knowing your opponent. All investors are not the same and you need to handle the meeting with extreme caution. If a potential investor has no interest in funding a project located in your city then you are wasting your time.

Be smart, do your research and you will get the results you want.

Not Being Honest

Overstating figures and facts is one of the worst things that you could do as a new business owner looking for powerful investors. You will just end up losing their trust and well we all know that no relationship can be based on a lie. They receive hundreds of deals in a year and they look for reasons not to invest, and not being honest is an easy catch.

You need to build trust at the beginning, which is something you need to prioritize. If your product does not sell the way you wanted it to, it’s completely fine, at least you were upfront about everything.

Not Looking at the Part

Your appearance is everything, and it’s a really important part of presenting the pitch. If you show up wearing something inappropriate then the investors or the buyers will never take you seriously.
Wearing a clean professional outfit that is appropriate for the meeting will help you in more ways than you can imagine. Human beings are very superficial and you need to take advantage of that. You should also focus on your body language and try to give off confident vibes. No one wants to work with somebody who has a nervous breakdown or fidgets too much. Keep control of your nerves and be remembering able.

Getting Cheap Advice

When it comes to investing in your business, try not to cheap out on legal counsel and advice when you bring on investors. Cutting expenses in this area might seem like a good idea at the start but you will end up paying a lot later. It’s better to be safe than sorry.

Fizzah Temur
Fizzah Temur

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