There are many aspects that affect your financial performance and, in turn, affect the perceived value of your company. Being able to illustrate the stability of your revenue and earnings along with validating your growth prospects are important factors.
Investors want to know that the company is not at great risk of losing key employees or customers because better options are available to them or because there is no contractual obligation to stay. While contracts can sometimes be restrictive for the business, they are vital to ensuring that your key customers are not in a position to simply walk away. On the negative motivation side, an important element is making sure that your key employees are compelled to act in the best interest of your company and cannot simply choose to start their own competitive business and try to steal your customers. Conversely, a powerful positive incentive to keep employees engaged and motivated is to provide some sort of bonus or profit sharing plan that vests over a few years…so they need to stay on board to get the amount total bonus they earned. A few years ago.
Another aspect that investors will look at is how careful you are in managing your company. Are you taking unnecessary risks in your trading? Do you have the appropriate industry certifications, adequate insurance, etc…? There are several ways that you can prudently manage risk in your business. In addition, they will want to know that your budget is based on meeting the needs of today and funding the bona fide opportunities of tomorrow. For example, if you haven’t gotten a single call out for having an expensive online or media campaign, why do you have one? Similarly, are you doing too much redundant management or not getting adequate efficiency out of your workforce? At some point, a savvy investor will want to know how prudently his company is being managed. They will want to understand that you are going to use your money to be prepared in sixteen downs, not waste it in the way you spend it, and certainly not be foolish in the way you manage risk.
An investor who is motivated by growth in the value of his capital will only invest his money in your business if he believes that its growth prospects are realistic. It is generally not practical to ask an investor to give your company the full value of their “forecast” where it will be five years from now. However, a comprehensive, well-presented business development plan that is fact-based and defensible can create an “FMS” feel. fear of missing something. By showing an investor that you have the people, the strategy, and the contacts to achieve his goals, he can go from being skeptical (and looking for reasons not to close the deal) to afraid of missing out. The possibility of an investor feeling ‘regret’ or ‘loss’ has a much more powerful emotional impact than being ‘excited’ about the opportunity…in general, people will do everything possible to avoid negative emotions rather than experience them. the positives.
When it comes to successfully selling some of the aspects of your business that affect financial performance, it is critical that you can show stability within your organization, that you are properly managing the affairs of the corporation, and that your financial outlook is credible and credible. Being able to convince an investor that these critical areas are competently addressed will give you the opportunity to remove many of the skeptical thoughts they may have, turn them into believers in your business and the opportunity they would be crazy to miss. us.
