You’re one of the latest contestants on the hit TV show, Let’s make a deal. All of the contestants are vying for the top cash and prizes. How do you win?
Real life may not be as simple as traders making deals, with a big dose of luck. However, the concept remains. A trader must be offered something of value and given a choice of whether to keep it or exchange it for a different item.
Here are our 6 steps to make a deal:
1. Be enthusiastic
You’ve got your new business idea? Ask yourself first, “Why am I doing this?” If your answer doesn’t burst out of your chest, then you are likely to turn off potential investors. Before you ask anyone for money, make sure this is what you want to do - even if you don’t get the money. Show why you need to spend the rest of your life achieving this mission. Be wildly enthusiastic because your idea is a life-changing adventure.
2. Test your idea
You have an idea that you are enthusiastic about, so now you can start to think about how to move forward. The best way to test a business idea is to build some kind of prototype and show it to people to get honest and authentic feedback. If you have something that works, you can create a minimum viable product, or MVP. The MVP is the simplest form of your idea that you can actually sell as a product. You are still in the early development process so you have space to tweak or change in response to the feedback from your audience.
From there you can also run it by a group of critics in the form of a survey. The survey can help you to identify problems that only your target customers can see. Make sure you select your survey group and size carefully. The group should be large enough to have viable feedback, and should be directed toward your potential target customers. Also, don’t choose people who you know tend to give a positive response. Ask friends or previous customers who you know to have a pessimistic perspective and are not easily pleased.
We now have crowdfunding sources where you can pre-sell your products before you even produce. When you’ve got a viable product and market data, you don’t want to give away equity or decision-making control. Pre-sales also provide further validation that your idea is good! This will ensure you don’t waste time and raise money for a business that is doomed to fail. Don’t underestimate trying to raise money from your existing customers. Furthermore, you don’t have to give away equity or decision-making control.
3. Live and breathe your business
We know how hard it is to capture someone’s attention. The world is incredibly competitive and it’s easy to get lost in the crowd - if you don’t live your business.
First off, you must create a “30-second elevator sell” to capture someone's attention. Before you can pitch your business or product you have to have something that people are interested in hearing about.
Once you’ve got someone’s attention, keep them interested with a rock-solid business plan containing a detailed analysis of your business and industry. Include your strengths, weaknesses, opportunities and threats. Ensure that your plan is realistic with enough evidence from your tests to substantiate your cash-flow projections. Know everything about your plan so that you can answer anyone’s questions or concerns.
Investors aren’t just investing in your business (or product) - they are investing in you. Sell “why” they should risk their money. Be worth it.
4. Be clear
It’s important that you look from the investor's point of view and what’s in it for them. Position yourself as a person of authority who is smart as a whip. Align yourself with businesses who have a similar purpose.
Once you have your plan, your presentation should be confident and clear about your outcome. Share your detailed plan of what you are offering, how it will work and how it will be monetized. Investors need to see how they will make money and get their return.
You must also demonstrate you have them means or a team to produce the intended outcome. Don’t pitch a job that you don’t have the means to complete because you will risk looking ridiculous.
5. Work out the details
The terms you agree on will be just as valuable, if not more valuable, than the deal itself.
Make your time well spent and your investor’s return worthwhile. Time is money. You should get paid appropriately. Once you’ve done several good deals and have shown your investors that you do what you say, you may consider structuring the next investment differently.
It becomes easier once you have a reputation and multiple investors have had a positive experience with you. A good experience always makes it easier for them to say, "Yes!" Over time, your investors will get more comfortable with you.
6. Send progress reports to potential investors.
Investors love momentum, especially when things are scaling quickly. Send reports to multiple investors. First, you don’t want to put your eggs in one basket. For every 20 reports you send, you may only hear one reply with interest. Next, you want to send reports over a period of time so you can show your investors that you are able to reach your full potential.