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Starting a new business from nothing is incredibly difficult. If you happen to have some money saved up that you can invest into your own business venture, you might be able to wait awhile before looking for other funding options. But if you’re determined to get your idea off the ground despite not having any money yourself, you might want to seek out other investors before you look at options like business loans. This will require you to have some difficult conversations with those you love and trust, as talking about money is usually something most people find to be taboo.
If you’re going to be having these types of conversations soon, here are three tips for talking with friends and family about investing in your business.
Ask In The Right Way
The way in which you bring up the topic of investing in your business can have a huge impact on how likely that person is going to be to want to give you some of their money.
Depending on your relationship with the person, you might want to give them a heads-up about what you want to talk about before you meet in person. This might include sending an email or giving them a phone call to set up a meeting. Generally, it’s not a good idea to have this whole conversation over email or the phone, unless meeting in person just isn’t possible. But so your friend or family member will have some time to think about how they can help and what they’re willing to give, it’s usually good to let them know what the meeting is about before you get together.
Be Open About How Much You Need, What You’ll Use It For, And What The Risk Is
The more professional you’re able to be when asking for a financial investment into your business venture, the more success you’re likely to find. So before you meet with anyone, make sure you have a firm grasp on how much money you need, what you’ll be using this money for, and what the risk is for their financial investment.
Have A Plan In Place For Repayment
If what you’re really asking for is for someone to make an investment into your business, there’s the understanding that they’ll be making their money back at some point. So while there is always risk involved, it’s wise to have a plan in place for how or when you’ll repay the money they’re investing in you.
For most people, it’s a better idea to plan your repayments based on meeting certain benchmarks with your business rather than trying to shoot for a specific timeframe. This way, your investor can know what the plan is without you having too much pressure put on you for repayment.
If you’re soon going to be asking your friends or family members for some money so that you can get your business off the ground, consider using the tips mentioned above to help you prepare for these conversations.
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