Launching a small business is certainly exciting. But it can also be a bit stressful if you have yet to find funding from an investor. This is especially true if you are opening a machine shop small business, since the machinery and team with specialized skills can be a bit pricey.
The good news is that there are a number of ways you can land an investor or venture capitalist for your small business venture. You may still need to get the needle moving with a little of your own seed money, but investors can do the rest.
Interestingly, securing machine shop small business funding from a bank is not on the table. According to The Balance, “It is very difficult for a new business to get a loan from a commercial bank or lender for business startup. New businesses are in fact the riskiest loans of any that a bank or lender might encounter.”
With banks not an option, let’s take a closer look at how you can get much needed funding the simple way for your small business venture. Let’s dive in!
Developing Your Investor Strategy
What if I told you that hundreds of thousands of people are looking to invest in businesses. You might not believe this statement, but you should. There are plenty of options out there, because people want to invest as alternative lenders and avoid the traditional investment strategies.
This is due to very low interest rates on returns, and can work to your advantage to secure funding for your small business venture. The main aim is to convince any would be investors that the business plan is thorough with a high rate of return on initial investment. Let’s look at how you can do this easily.
Highlight Potential Profits On Investments
This is very important when it comes to securing an investor and that seed funding you need to start and grow you machine shop. One of the best ways to do this is to test the market and get some hard data (profit numbers) behind your investor pitch.
For example, you can use source machine tooling equipment used, minimize startup costs on facilities by renting, not buying, as well as create a simulated payroll you think would be best to get the business off to a good start. Next, find bids and quotes on existing businesses, and then compare it to your startup costs. This will give you the data needed to show approximate profit potential.
Showcase Growth Potential In Your Industry
Another essential element to ensuring you get funding for your machine shop small business is to prove market growth in your industry. This is pretty simple, since plenty of statistics on industry growth live online.
For instance, research by Freedonia World Machine Tools found that the machine tools industry will be worth over $175 billion next year. That is an impressive stat that can thwart any naysayers to your proposed business plan when it comes to growth in your industry. There are other studies like this one online to draw from as well.
Have An Actionable Marketing Plan
Marketing is the bedrock of any small business. It provides the growth spark needed to grow a small business into a successful company. Having an actionable marketing plan in place for your investor meetings will boost confidence and also show how you plan to grow the business in order to recoup bigger investor returns.
For example, you can detail the PPC plan you will use to build up lead generation momentum online via Google AdWords. You can also showcase traditional marketing value through localized marketing strategies, and more. This can be very useful when it comes to landing investors.
Show Investors Your Small Business Strengths And Assets
Investors generally don’t want to get involved with a small business they give funding to. However, investors do want to ensure you have the capabilities to run and grow a successful machine shop small business. How do you do this?
First, look in the mirror. Why are you the expert in your industry? Most likely you didn’t just wake up one day and want to open a machine shop. You probably have decades of machining experience and a robust network to grow your own business. Next, look to your team. Highlight the knowledge and skills your team has to get the job done. This will boost confidence for investment a lot!
In Conclusion . . .
Starting a small business is certainly not easy, especially if you need funding to get it underway. But despite the potential risks for investors, there are definitely plenty of benefits you can highlight to land the funding you need. Get investment today and make your small business a major success.