Every person has ideas on a daily basis. However very few of those ideas become a business project, in the form of a product or a service. Of the many ideas that have become a business project, you can see that some ideas are very complex while others are quite simple. This means that the key factor for turning an idea into a business is not necessarily in its complexity.
The process from turning an idea into a product or service usually requires money and other resources. Small projects will require a small amount of money, while others require much more money. It’s usual that the entrepreneur doesn’t’ possess the money, so he/she has to look out for investors who are willing to provide the financial resources. This is a task that’s not always easy and for this article I want to show some aspects that are important for this subject.
The first step for selling an idea is of course, having an idea. Without the idea you have nothing to tell the investor. The idea might sound as the most important aspect, but many times other aspects are more important. For instance, you can have the best idea for a product but if the business model is not clear, the idea will have no value for the investor. So instead of focusing too much on the idea, focus on how it is going to bring money for the investor.
Another vital aspect is selling you as an entrepreneur. Investors invest in people, not in ideas. Although you will generally be required to write a business plan, with stats and figures, most investor will focus more on how you (and your team) will deliver. So this becomes a selling process, where your focus is to show the investor you are the best person and that no one else will be as good as you. It is the same as when you’re deciding to buy a PC, a TV or a Car. You have many options but for some reason, which has been presented to you either by the brand or the vendor, you decide towards one or other seller and/or brand.
There’s an added complexity to the individual selling process. You have to sell yourself as an individual, but also as part of an entrepreneur team. That is, the entrepreneur team has to show the investor they are the best around. Some elements to take into account, is to show different degrees of expertise, on different fields and backgrounds. It’s usually better to confirm a group with these characteristics, than for instance a group made solely of Engineers or Economists. This is an error I made early on and that has showed me the importance of focusing in the creation of high quality and value teams from the start.
To sum up, each entrepreneur has to convince the investor that they are the best, both at a personal and team level. This is not always easy, but it’s not impossible. So entrepreneurship becomes a selling process, such as you could find with any product or service.
If you’re wishing for an investor taking on your business idea, please remember these 3 points. I’ve had the experience of talking with several investors in the past, and most of them will appreciate these aspects. If you feel you’re weak on any of them, work on them until they’re good enough to be presented to an investor.
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