This is a guest piece by Rwituja Gomes Mookherjee, Head Creative Economy, India & Sri Lanka, British Council.I put these points together after sitting through a session where creative entrepreneurs pitched to UK investors.
Clarity of thought
Clearly articulate the core business idea, focussing on what it aims to achieve. During the organic growth of the business, there is a tendency for the idea to expand and diversify which the entrepreneur feels compelled to cater to. However, it is essential to regularly re-focus to develop a growth strategy that is clearly in line with what the business had essentially set out to achieve.
Clear understanding the target customer and size of market the business is catering to. Does the market already exist or are you creating a market for your product or service? Is it a niche or mass market? If it exists, concentrate on one or two markets at a time while expanding your business. Know your competition well and their market share. The organic growth of your business can be the most sustainable option.
Investors are always sceptical about one-man / woman businesses which are how most creative businesses are structured in the initial years. Build a team based on individual competencies which match with role requirements within the organisation’s structure. Clarity about roles and responsibilities, one’s ability to delegate is essential for smooth operation especially when you’re thinking about scaling up.
Building your brand & positioning it
Identify the core strength of your business and continuously reinstate that amongst your customers. Your existing customer base is crucial to your growth as word of mouth promotion is the most basic way to build your brand. Be clear about where you are now and where you would want your brand to be going forward. Collaborate with bigger brands to position yourself amongst the bigger players. Network and nurture relationships with those who will be your natural brand ambassadors.
Valuation of your businessMove away from only focussing on the qualitative analysis and success of your business. Focus on numbers and financials instead. This is essential as it will determine how much money you can ask for. Conversely, it will portray the strength of your ability to get high enough return on investment for the investor.
For creative businesses, VC and private equity should not always be seen as the only source of investment as the rate of return is the highest when dealing with them. Please understand that they are business people who but naturally want to make the most of their investment. Government grants & schemes, banks, philanthropic institutions and foundations, corporate houses, family run businesses, and the quintessential ‘family, friends & fools’ are suitable options too. In each case, you will need to define a ‘hook’ and pitch your idea differently. If you’re profitable, plough that money back into your business and you may not need to look for outside investment. If you’re still keen to work with a VC, it might help to get them to mentor you instead. It is a good way for making them understand your business and see its growth. Their understanding of your capabilities & strength as an entrepreneur also helps to build a level of confidence & trust that is mutual. In future the same mentor can become your potential investor!
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