Natural Growth: 3 Reasons Why Your Startup Should Not Immediately Seek An Investor

So you’ve decided to start your dream business, and the first thing you want to find is an investor or two to help you get your vision off the ground. However, that isn’t always the best way to start a business, as the process of seeking funds can add weeks, months, and sometimes years to your startup time. Investors are important, but you’ll find that it makes much more sense to start small and bring on investors slowly, as your business grows naturally. Here are a few more reasons to think twice before you start seeking investors.

 

Personal risk

 

Don’t seek an investor because you don’t want to use your own finances to start your business. When you start a business, nearly every new business owner knows, you end up having to make your own investment. If you are too worried to invest your own funds in your business, then you may want to rethink your commitment to the business itself. If you don’t have a lot of personal financial support, then potential investors won’t want to cough up funds either.

 

Go big

 

Another potential reason to find investors is to launch your business or service on a huge scale. Instead of trying to start big with a large financial investor, start small and focus on a limited rollout with a strong product or service first. Once you find your first customers, you can begin growing your business organically with investors. It will help a great deal to have a strong base of customers before you bring on those investors, plus you can show that you have a proven business model, which is what any investor will want to see.

 

Needing staff

 

As you start your business, you’ll start to think about how many people you need on your team and what kind of hiring you can do. However, you won’t have the funds to hire a full staff right away. Instead of seeing investors to hire staff, consider finding other ways to get some support. Try bartering or offer equity work, or see if you can find some way to share revenue instead of salary, at least to start. You’ll find lots of ways to find help in the office without needing to find investors to fund your project.

 

This article was written by Deborah Flomberg of Examiner.com for CBS Small Business Pulse.

 

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