Differences between a good business idea and a bankable business idea

by Brain Essien

Ever faced a potential investor, and with much thrill, you reel off the many life-changing benefits your business idea, product or service could have on the world whilst bringing them good fortune, and just when you thought the smile on their

face, the nods of appreciation at your presentation, and the seeming excitement they exude as you rambled on meant a cheque was in the offing, you hear, “It’s a good idea, but really not worth my while”, then you get the proverbial cheerful handshake and the words, “but best of luck”, and then that’s it, you walk away with your tail between your legs.

A few rejections later, and you begin to ask the inevitable question. “But, this is a great idea, everyone attests to that, so why can’t I get even a single investor?”

Well, it goes without saying that the world is fraught with lots of good, perhaps even transformative business ideas. Many of which have unfortunately never seen the light of day because of one simple reason; they were not bankable. As the Americans say, ‘you simply could not take it to the bank’. And as much as the word bankable could be used interchangeably or even construed for other meanings to include creditworthy or loan accessibility from a bank, we will limit the discussion of this article to ‘investability’.It is unquestionable that an idea or two of yours could do with some injection of sourly needed funds in 2022. So, we shall dissect what makes an idea worth investing in.

Firstly, a good business idea, is simply as its name implies, and no more. It’s a feel good projection or intention that if, perhaps, given some added devotion could lead to enough attention from a potential investor, or even the world.

Most good ideas rarely ever make it past the planning stage though. Call them daydreams if you will. To attract investment however, one critical criterion will be to get off your arse and bring it to life. Like the movie pundits say, ‘don’t tell me, show me…’

No better way exists than to begin with a feasibility study or a business plan. So, even if you’re writing a book you hope to publish someday, an investor, no matter who they are, will deem it investable if you can at least show a goodly amount of research that has gone into the project, and perhaps a few initial chapters or a completed draft.

Next will be commitment. Just like when you step into a bank wishing a loan, an investor will deem your idea worth their commitment when they see yours. Investing considerable time and of course, your own money, and having a little more to still spend, indicates dedication most investors are willing to risk on. As the saying goes, ‘bookies pick the jockey, not the horse. So dedicate significant resources to your idea.

Setting precedence should be your next priority to project bankability. In banking circles, it means, having good, clean financial records, a positive cash flow and an existent market to show. This effectively means having to start the business on your own and manage it for a while until it shows positive feedback or demand from your intended market. So, if you’re thinking of going into publishing, you will probably have to go it all alone at first, showing how well received your work is before investors possibly commit. Thus, time will invariably either become your best friend or worst enemy as you work to prove your idea investable. Best to use it wisely.

Find a mentor, even if you have to pay one. Having a mentor is akin to having a forest guide. The deeper into the jungle you go, the more you have to rely on their experience of the terrain to enjoy the journey and avoid needless pitfalls. Some mentors may not have the finance to invest in your project, but one phone call or a business meet could turn things in your favor. Tread carefully though as not those you wish could be worthy of this lofty position. Seek mentors with proven track records, the will and the patience to want to see you succeed.

They actually make your investor pitches easier by a long shot.

Now, remember what we said about the jockey and the horse? Well, it doesn’t end there. Investors also bank on the team. Thus, and in this case, experience counts for much. Do not just pile on people to your management team because they are your friends though. Ensuring they have ample know-how in the positions they hold is a surefire way to calm investor nerves when it comes to banking in your idea. And always ensure everyone is present for any presentation. There is always comfort in numbers.

Always remember the golden rule of business success when investor pitching. It can be summed up in these three letters, VVF; Value, Volume, Frequency. What intrinsic value does your idea bring to the global table and your investor’s pocket or image? What is its current adoption rate, only then can you successfully show a future projection analysis for its frequency of use. Inability to answer the VVF question at any pitch meeting could come with irreparable results. So always be poised for it.

Get written backing. Funds are more liable to come your way, if you can show notable commitment from other potential investors or financial backers. Having these in written form; email, text message, or better still a formal letter, goes a long way to allay an investor’s fear that they could be the only passenger on your ship.

Finally, stay networked. Always stay on the grid. Move in and out of circles, making as many friends and contacts as you possibly can. Speak to as many trustworthy associates about your idea as possible, feeding off as much criticism, both positive and negative, as possible. In fact, negative feedback may even help you see the potholes in your idea better than the positives will. Thus keep an open mind.

And most important of all, having a condensed yet comprehensive business plan cannot be overstated. Without a plan to show yourself, your would-be investor what is, where it is and how you intend to get it for them, not just yourself, and within what timeframe? No one, and I repeat, no one will even give your idea a second thought.

Your grand idea is as good as dead without this most basic of ingredients. Spend considerable time fine-tuning it to near perfection.

Stay the course and do not give up…

Brain Essien is a business consultant, with expertise in crowdfunding and business plan/proposal formulation and design, working and living in Lagos State.