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How to Make Your Business More Attractive to Investors

How to Make Your Business More Attractive to Investors

If you are considering expanding your company or increasing your staffing, then you will have to think of how you are going to finance it. If your business is doing well, you might have enough capital to fund it yourself, but usually, companies will need to find additional investment. The decision to bring in outside investors is a big one because you need to weight up the options. You must think about what you will gain from your company up against how much control you will lose. To get the best form of investment, you must make your company attractive to those that will finance you.

Have Up to Date Financial Details

Investors like to have a good idea of what the company is doing financially. Although your sales may be good, your profits might be slim which means potential investment return will also be slim. They also need to know that you have been running the company in the right way so that no financial surprises pop up later. To ensure you give them what they want, you should be aiming to have at least three years of audited financial records ready for them to see. If your company is less than three years old, then you should have all the financial records to hand.

Cut Excess Costs

You might think it odd that you need to cut excess costs to gain more outside financing, but it’s just what you need to do. Investors need to see that you are being prudent and handling the financial side of things well. It is also a good idea to have as much profit as possible coming into the company. The more profit you have, the more investors will get on their investment. You need to look at all areas of your company to see where you can shave off a little excess cost. It might be that you can renegotiate with your suppliers or maybe outsource some of your processes. Anything you can do to increase your profits will increase your company’s attractiveness.

Be Sure of Your Reasons for Expansion

When you are talking to investors, you will be explaining your sales pitch many times over. You need to make sure that the reasons for your expansion, what you hope to gain and what will happen if you don’t get funding are clear in your mind. If you are unsure what you want, then how can you expect outside investors to trust you enough to give you the money? The strategy you intend to use needs to be carefully thought out and detailed in writing. Otherwise, it might jeopardize any potential deal later.

Know Your Expansion Details in Advance

As well as knowing why you want to expand, you also need to know how much you will need and where it will be spent. Investors like to have a clear goal in mind, and they like businesses that have planned every aspect of the expansion. Start by working out how your expansion will happen; will it mean extending your current building or seeking a new one? Speak to property agents such as Liberty Properties about suitable locations and the cost. What equipment will you need to increase your productivity, and how will that affect your profit margins? If you can deal with these questions before they are asked, it will go a long way to impressing your investors.

Have Good Leadership

Most investors and buyers are concerned about the leadership of the company. They want to know that your company will stay successful after the expansion. It might also be the case that you will be busy overseeing the expansion, so the management in place must be able to cope with the day to day running of the company. The investors need to know that you and your team can handle the expanded company and continue to make it grow.

Make Sure You Are Hitting Your Budget

To gain the confidence of your potential investors, you need to show them that you can keep the company on a financially sound footing. Do your best to keep your company on a budget or within it so that they can see you are running the company efficiently. If you go over your budget, investors will think you are not trustworthy, but if you beat your budget, they will be eager to keep you and may want to close the deal sooner.

Don’t Be Your Company’s Best Employee

If you are going to win over your investors, you need to show them that your company has talent. They want to see that the success of the company is because of more than just your input. Hopefully, you will have spent time attracting talented personnel that you can rely upon to keep the company moving forward. You ideally want to have talent in all areas of your business, not necessarily every employee, but have them spread out across the company.

Have Good Legal Counsel

It is important that you have a good lawyer that has experience of this type of deal-making. They can give you some invaluable advice about what matters and what doesn’t. They can also tell you if the investors are asking too much from you or are demanding too much on their return. The other reason a lawyer is a good idea is that they can take a look at any agreement drawn up and see if there are any catches or clauses that could become problems later.


More than anything else, you need to be patient when dealing with investors. It can take up to six months to secure the investment you need because understandably, investors are always cautious about giving someone money. However, if you do everything right, you should have the investment you want in time.

Getting outside investment isn’t for everyone, some business owners don’t want to give up part of their company to someone else. However, it can be just the thing you need to grow your company further.

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