Put on the Spot? Be Ready to Answer any Questions about Your Product with These 5 Tips

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Image by: CollegeDegrees360
By Lucy Clara

So you’ve finally got your business going. Your social media networks are all set up and you’ve established quite a following. You’ve taken the time to teach your staff, and it shows that you know the ins and outs of your business as well as your products or services. Congrats, you’re on your way!

Now that your business is growing, it’s time to start spreading the news outside of your comfort zone (as every successful person knows that if you’re comfortable, you’re not pushing yourself hard enough). In order to spread the news, you have to be ready, I mean this isn’t your friends and neighbors you’re just selling to. You’re selling to prospects all over the world and investors will seek someone who knows their stuff. They might have difficult questions and you have to have the answers.

The downside to being an entrepreneur is that there is no hand holding . They cannot expect the guidance and comfort that books can offer. Business owners must make mind boggling decisions everyday and unless you are fortunate enough to fund a startup on your own, you are going to have to seek investors to help you.

Here are 5 questions that you will be asked, by investors, and how to wow them with your knowledge when introducing your business to the world.

#1) Are these Numbers Real?

When pitching any idea pertaining to business and whether you’re talking to investors, or receiving data, the first question will more than likely be, “ What are your numbers/sales?” In this case, you will be more than just ideas at the top of your head. The proof is in the pudding.

Investors will want to know where your sales are coming from and how you are obtaining the sales (through marketing, partners, etc.). You will also need to show whether or not the numbers that you come up with will increase or more than likely decrease. When it comes to sales, of course, you would hope to show potential increases, as investors want to help companies that will make a profit.

#2) What’s Your Competitive Advantage

Like all businesses, unless your products is completely coming out of left field, you will more than likely have competition. Competition, as well as customers, are what fuels entrepreneurs to work harder at meeting their goals. No business owner wants to be put out of business by their competition.

What makes your product stand out? Is it more efficient? Is it better quality? Any determinate that puts you a step above the rest is appealing to investors.

Dr. Jonathan Kaplan from medical tech startup, BuildMyBod, says, “ It’s not good enough to tell your customers how awesome you are…you have to show the and prove to them why you’re better than your competition over and over.” Also, don’t forget that business is an ongoing thing. Just because you knocked out your competition last month, doesn’t mean that you can ever be comfortable.

#3) What Do You Bring to the Table?

Aside from being a quality business leader, who is a cut above the rest, what attributes does your company bring to world in general. You’ve probably seen the show, Shark Tank, in which investors aren’t only interested in the end product, but the person as well.

When asked, “ What do you bring to the table?”, to ensure your consideration for funding, you have to provide investors with successes from the past. Have you founded a startup? Did you launch a successful campaign? Anything that makes you seem top notch, will prove to your investors how valuable that you are.

#4) What is Your Market

Aside from having goods and services, who will you sell them to? Who is going to be interested in what you have to give them? When you came up with your business idea, your probably had an idea of who you wanted to sell to. Perhaps your business caters to women on the go, or families, or men who are single-whoever it is, you need a clear idea of where your marketing will go by the demographic you sell to.

Marketing Donut has a helpful six-step guide that assists you in defining your market that you can review before facing investors.

#5) What are the Risks?

No business, no matter how successful it is, is free of uncertainty. Part of successes are taking a risk to begin with. Since investing in a company has it’s share of unpredictability, you should inform your investors of all the the risks involved in your startup. By doing so, you prove to your investors that you know your market as well as your business.

Considering questions like who is on your team? How can you compete with similar businesses? Or What are you goals are all good questions to be ready to keep in mind. This not only puts your investors’ minds at ease, it also minimizes risks in the long-run.

#6) What’s Your Exit Strategy?

It’s hard to think about, especially when you’re on cloud 9 about the success of your business, but every owner needs an exit strategy. In other words, how will you cash out of your business and pay your investors back, should the business fail? Mergers are good to consider, as your business will not completely implode, but you will merge with another company in order to keep it up and running.

New business are popping up everyday, on every corner of the world. If you plan to become one of the millions of owners with a thriving business, you have to know what your goals, as well as who are are planning to sell to, among many other things. Going into to investing a business blindly is a sure way to fail.

Instead, prepare yourself for questions that you may not have thought you needed to answer, it not only helps you, but knowledge is power. When you know better, you do better.

Let’s get your opinions. What do you think are some of the biggest mistakes that owners make when starting a business? Do you have plans to start a business that you think would be compelling to investors? I want to hear from you!

One Response

  1. BethanyR

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