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You have a good business idea, will you establish a company as a small prototype then looking for an investor? or you will search for an investor before establishing the company?
When you think you have a good idea to start a company there is still some hurdles to take before you are ready for investment.
First, know that you will most probably have to adjust your idea about 100 times before it is ready for investment, let alone market.
Second, you have to convince investors that you are the right person (or more likely have the right team) to bring this idea from concept to market. You do this by:
· Designing a highly profitable, yet likely, business model
· Making a prototype or rather MVP (Minimal Viable Product) https://en.wikipedia.org/wiki/Minimum_viable_product
Making the sales statistics of the MVP so convincing that investors want to jump in is key here. The better the statistics, the better the deal you will get.
I know this sounds very challenging, making a MVP that is sellable. Please remember the following; a MVP does not have to be the complete product. Actually if you are not ashamed to show your MVP to anyone, then you did too much work.
A very attractive way to make a MVP is just build a landing page using one of the existing services for it. Also make 1 or 2 target groups that would be the ideal initial users of your product/service.
Your landing page should collect data about the users that would be your initial target group. Things like email addresses, what variant of the product/service you offer they would be most interested in (keep in minimal though, every field you add brings down the response rate considerably). I know it is a little misleading, yet let them think they will get access to the product/service you offer to convince them to give them your email address.
The target group should be so small and specific that you can really speak to these people like you know who they are. Take general characteristics and also specific once for your product/service. After this advertise on Google, Instagram, Facebook, or whatever fits your target group best and see if enough people click on the ad and how many leave their information. Remember these numbers should be impressive, if you would pay the amount you did per email address would that be enough for you to still make a healthy profit?
It the answer to this is “YES!!!!!” then it might be time to go to an investor. If it is “yes!” you need to adjust and try again.
To make sure you get interested people to see your ad, make a very specific profile of your initial target group. For example if you start a flower delivery service: “Married moms between 30-35, with 2 children one of 1-2 and one of 3-5, have a healthy life style, are in to fashion, into sports like swimming, yoga, cycling, read the news online, love flowers”. This so your ads get only shown to them and not someone outside your target group and wast your money and bring down your statistics.
Hope it helps. Good luck!
I would rather go for establish a company with a small prototype business than going to find investor first . Why? because it easy to convience the investor to invest in abusiness that already existed than putting money for an business that has not existed yet .
The other point is the level of risk that the investor will take will be less with existed business comparing to non existed business yet.
The swot analyis for such small existed business will help the company and the business with the investor to identify which area we should fund , is it R&D or Distribution channels or manfacturing technology or Marketing
The established business even if it is on a small scall has a clear financial review , at tleast there is finacial statement the investor can check it and take a decision upon it .
Thanks
I would establish the business then search for investor
If you have some cash to sustain it's always better to establish a company as prototype and then look for investor, because attracting investor becomes easy. Besides the control excercised by investor would be lower in such case.
I totally agree with the experts,
From my personal view,
I'd confirm an investor before starting the business because I believe that if your business was a good idea then getting an investor would be easy due to your way of making profit for the investor.
So the logical decision would be getting an investor to establish your prototype so you wont face this obstacle in the future.
You should search for an investor as soon as you have planned that what you will do with the investments.
Sometimes the money is required to bring the idea to reality and other times, for expansion.
Based on that business idea business plan and type.
Mobile applications, most of their costs are programing and development fees. Therefore, you need to search for investor at the beginning to keep your good business idea unique. Otherwise, doing it on a small scale will let competitors copy it with a large scale which will be more difficult to convince investors to compete.
Broker agency, is recommended to start a small business before calling investors.
The choice goes back to the real conditions of the ocean, especially in the protection of business as well as freedom of investment
If i will be having enough resources to establish a company on small scale i would prefer to go for that option and after running it i will search for investor if needed.
