Whatever the size of business, it may reach a point where its owner cannot sustain its growth through continual investment in the business. There are limitations on generating finance through one source from commercial lenders etc. However, the increased profits through the planned growth would make a substantial impact on the owner.
Therefore, another option is to look for an equity investor, but what would attract investors to your business?
Your Expertise & Track Record - A potential investor would look at the expertise and track record of the founders of the business and its management too. It’s important to consider the people that are guiding the business, to see if they can maintain and sustain the potential growth, because the investor would be looking ultimately to get a return on their investment. You can only make certain predictions about the future by assessing past patterns and this is how they would view the business.
Your Competitive Edge / USP - An assessment of the business’s competitive edge would need to be made or a review of its USP (unique selling proposition). Can the business compete within its current market place? What does it offer to gain business over its competitors? What makes its products and/or services unique to its competitors?
Your Marketplace(s) - A potential investor would also look at the marketplace, for example, if the business was selling a text messaging system to schools. How many schools can they sell this to? Will they buy this product once? Will the technology expire within this marketplace? Are there other potential marketplaces where the technology can be used?
Compatibility - They’d also assess the compatibility between the management, the business proposal, their skills and preferences. This would be to determine whether they and their investment can fit into the business alongside the current management in order to meet the business objectives and goals.
Financial Commitment of Your Management - And finally an investor would look at the financial commitment of the management within the business. They would not only look at their possible investment, but also their function alongside what they take from the business.
Whether you are a business seeking investment for business development and growth in exchange for shares or a potential investor looking to explore the possibilities of investing in businesses, B2B Cashflow Solutions Ltd can provide advice and assistance for both the business owners and the potential investor.