If you ask how do I find an investor, you should know that one of the most important factors considered by investors is the ROI or Return on Investment.
What is ROI? Understanding Return on Investment is the amount of money earned investors an advantage in investment. ROI is usually expressed as an annual percentage of the total investment.
Figures in this ROI can help make a comparative advantage to be gained for investors quickly. Suppose there are two business opportunities, which the company invests in the "X" and which only invest in stocks.
With ROI, the investor can choose which ones yield the greatest benefits from their money. Is investing in company "X" is, or they choose to invest in stocks. The higher their ROI, the better. So if you need an investor, ROI figures is what they see.
There are several basic factors that determine the ROI of an investment. The basic factors are:
- All financial costs, including the initial investment and subsequent investments.
- All financial gains, including increased funding (if any) of the investment and the return of investors' money.
- Period of time, ie how long does it take to make a profit.
- Non-financial profits in investments, such as satisfaction gained by participating in the development of the new company.
I'll give you an example so that you can easily understand. Suppose you are an investor who is considering investing in one of the two companies, call it Company A and Company B.
- Company A: Investing 50 million, is expected to return a total of 100 million within 2 years.
- Company B: Investing 150 million, is expected to return a total of 300 million within 4 years.
In the example above, where a better investment?
We discuss slowly. First, a company will make a profit of 50 million. Remember, your capital 50 million. Whereas company B would generate a profit of 150 million, because you had invested 150 million.
At first glance, the investment in company B will generate greater profits for you, that is 150 million dollars. But due to the length of time required before the investment pays off in company B, company A simple ROI is actually higher:
- Company A: back 200% in 2 years or 100% ROI per year.
- Company B: back 200% in 4 years or 50% ROI per year.
Remember, earlier we have discussed above that the higher the percentage the better the ROI. Thus, company A is better ROI because ROI is higher than company B, even though less profit.
Therefore, you need a high ROI. Whoever your investors, ROI is what you should promote. Although the investors were friends or your relatives. Just because because you or your friends, you underestimate your ROI.
Only, you have to be careful when choosing your friends, family or relatives as your investors. Please read my article about if a friend or relative to be an investor. There are a few things you should consider.
One more, in addition to the ROI that you must take, you also have to be patient in looking for investors. Patience is also a key to success in finding investors.
Importantly, you are always embedded within a positive attitude if you expect that investors apparently have not been willing to fund your business. A positive attitude is what makes you able to include the characteristics of successful entrepreneurs.