There’s something about owing someone you know money versus owing a bank money that will make you try a little harder. If you begin a small business, but you’re short on start up capital, the bank may not be interested in loaning you the money. In that case, you may want to gather a group of private investors. When it’s individuals that you’re indebted to, it’s a different story. Private investors keep you on your toes because it’s a real person you have to succeed for.
Before you go the private investor route, you’ll need to do a few things. The first thing you need to do is create a business plan. Spend a little money and find a good business plan template on line. Fill it in honestly, and don’t skip the hard questions. It will ask for a great deal of detail, but that’s the point. If you can successfully complete a business plan, then you can probably make a success of your business. Just make sure you follow that plan! Your investors will want to see it, too. That’s what will help them decide to help you or not. If the plan seems sketchy, they may tell you they aren’t interested. In fact, a bank will ask for a business plan, too.
The second thing you have to do to keep investors happy is work hard and run an efficient business. Investors get paid from the bottom line. The bottom line is what’s left over after all sales are final and all bills are paid. The bottom line is your net profit. That’s what investors care about.