We may wish or like to imagine that we can go it alone or try to do everything ourselves, but unfortunately that is not always the case. Sometimes we need a helping hand. This may not always be in a financial sense, though on many occasions that is the case. Bringing outside investment into you company- your baby, may be a difficult time. However this need not be the case.
There are a multitude of benefits when it comes to welcoming a new investor into the fold. Some of these benefits we shall try to outline in an effort to make you feel more comfortable with giving away at least a small part of your business.
Knowledge is Power
As we mentioned, on many occasions the motivation for attracting an outside investor may be to introduce capital in order to grow the business. This need not always be the case, quite the opposite in fact. Anyone with experience of pitching their business be it to a friend, venture capitalist or even on TV shows such as Shark Tank also knows the value of knowledge and connections that a certain investor can bring to the table. This could be in terms of product/market knowledge, access to areas of the market which are otherwise restricted, proven sales channels or connections in the industry to help advance a business. All of these things can be even more valuable than a case investment in many instances.
Many Hands Make Light Work
It may be cliché to say in some cases, however most of these expressions turn out to be true. An extra investor who is willing to pitch in on the workload can be of tremendous value to a company. This could free up time for you to focus on any number of business aspects from new product development to marketing. Understanding that many new and innovative businesses actually fail by trying to do too many things at once and losing focus is key. Those extra set of eyes looking over your work, while we don’t often enjoy it, can offer a unique insight in solving problems we previously struggled to overcome.
Quite simply, investment is essential and also the driving force behind most huge corporations. Anything from Berkshire Hathaway on one end of the spectrum, building a portfolio inclusive of huge MNCs and other blue chip stocks to your local mom and pop store who take on their nephew’s investment to ease into an early retirement. If you plan to grow and expand your business or run it for a long enough time to scale generations then you will experience outside investment of some sort.
Some people, especially those who lack confidence or trust in others may be apprehensive regarding outside investment but the fact is that this is a key point of doing business and a perfectly healthy and often time’s beneficial route for a business to take when raising capital.
We all like to think that our ideas and business strategies are the best. Better thank those of our competitors. In many cases we may be correct, we certainly hope to be. Many of us however face a very difficult set of decisions when things are not going as originally planned. When is it time to make some strategic changes?
In this piece we hope to identify the reasons behind many such incidences and things which you can do to remedy these situations without losing huge revenue and ultimately hope to see a turnaround in fortunes for the business.
You’re not Always Right
This is the first and harshest lesson which many of us have to learn as entrepreneurs. It will inevitably come along in some shape or form. How we handle this moment can go a long way toward defining our business future. For many it is a baptism of fire which hopefully they can ride out. Some fine examples of this may be companies who have rebranded and reshaped their offerings over time. In this type of situation, think Google or YouTube. These are both iconic and world renowned brands today, however both struggled with any sense of identity and even profitability in the early years.
Change or Perish
When you are faced with a challenge there are often many options which boil down to a simple two. Change or don’t change. In almost all cases, the reason for a decile has some driving factor. There is some intrinsic problem with the business. This is almost always only solvable by implementing a wholesale change. Those who refuse to move with the times or as the market signals guide them, face almost certain destruction. There are so many cases of this, we can look at the likes of Nokia as being a prime example of a company not modernizing fast enough to keep up with the changing market.
If you notice a downturn in business, of course you will naturally be concerned. However, before you go selling up house and home to fix things, take a moment to consider the bigger picture. Falling revenue is never something we like to see, but remember, many businesses are cyclical. This means that they will naturally have busier periods than others. For retail, that may mean doing huge swathes of business over the Christmas period whilst in the fitness industry it may be quite the opposite, with the key market uptake in the winter months of January as those New Year’s resolutions kick in.
As we can see, it is important to think carefully before making any wholesale changes and to understand the natural cycle of the business. Your reduced revenue may be very well typical of every business in that industry. On the other hand it is also vital that you pull the trigger and execute when the time is right to avoid bigger problems. The key attribute you should possess is instinctive decision making.