For many entrepreneurs and small companies, the uncertainty of today's economic climate is making it increasingly difficult to attract investment.

The results of a quarterly global business barometer conducted by The Economist highlight that business confidence is ebbing fast. Investors are becoming very cautious, driving many away from the first stage of investment with small businesses and entrepreneurs.

Glen Hopkinson, director of Connect Yorkshire, an organisation helping young businesses to secure investment, believes that in today's economic climate it is more important than ever for those wishing to attract investment to focus on the things that really matter. "Understanding the effects an economic slowdown will have on your business will impress investors," he said.

Connect Yorkshire offers the following tips on how to attract investment in tough times:

Demonstrate return on investment
With investor caution at a high, greater assurance is needed for investors to put their money into your business. Clearly explain how their investment can give them a return, by demonstrating realistic forecasts and projections

Show healthy profit margins
Profit is a clear figure that will show that you know how to run your business and raise investors' confidence in your ability. While you may only be able to present low sales figures, healthy profit margins will demonstrate your business' aptitude to be ready to make more money when the economy stabilises

Continue to grow
While profit is more attractive than growth, just because the market is cautious about making expansion decisions does not mean you need hold back on growing your business. The ability to grow steadily will illustrate a capacity to reward an investor in stronger times

Look after small customers
Aim to exceed the expectations of your customers who are buying from you in these tough economic times, regardless of their size. By running a limited customer base of small clients you can provide a level of service that they will not only come back to you for, but also recommend to others. A reliable long-term cashflow can make your company much more attractive to investors

Watch your expenditure
Cautious investors want to see evidence of stern financial management. An investor needs assurance that the business can conserve money both to see it through the downturn, and to take advantage of other opportunities as the economy improves. Financial discipline is the key to securing investment

Get good advice
A great deal of information and help is out there for small businesses and start-ups, so make sure it is from a trustworthy source. The best advice will always be from people who have been there and had real experience

Market yourself
Investors back the people involved, so demonstrating and pitching your abilities, vision and track record is just as important as your business plan, products and ideas. Explain how you will work with them. Investors want to see that any economic uncertainty will not alter your drive to make a successful and profitable company

For more information see www.connectyorkshire.org [1]