There are different approaches that you can undertake when growing a startup business. Some business owners opt to grow their companies organically as funds flow in, while others see the benefit of a capital injection and a subsequent increase in marketing and investment. Most successful large businesses will have benefited from a cash and knowledge boost at one point in time.
Why You Should Look for External Funding
There is one advantage to not letting other parties invest in your business: you will retain full control of its operations and all profits derived from it. However, very few businesses of significant size function in this manner, purely because everything from launching products to gaining market share requires capital supplied by investors – and often in large sums.
Though you could choose to operate on a small scale, the profits distributed through a large and successful company that gained scale via multiple investors will be substantially greater than those of a small company that never attracted investment. Funds from investors allow you to enter markets that you could not otherwise afford to compete in with small business advertising ideas. Instead, it will give you the ability to make capital outlays that can help your business break through to a bigger league.
Additional Benefits That Investors Offer
Investors are not only sought out for their funds but also for their expertise and their contacts. For example, David Kiger is an experienced angel investor, and he guides owners of small companies through the more difficult stages of growing a business. Mr. Kiger and other investors with extensive business knowledge can likely help you solve issues that you find challenging or spot market opportunities that you are not aware of.
The connections and industry contacts that investors have can also be of great value. You may be looking to break into a market but are finding it difficult to gain a foothold. If you acquire the right investors, then they may be willing and able to help you connect with prospective customers or hard-to-convince suppliers.
What To Look For In An Investor
It is important to look at investors not only in terms of the pure monetary contributions that they can make but also other factors. Investors who are experts in the market that you operate within should be at the top of your list, as they can enhance your present level of expertise. Their knowledge might come from previously operating businesses like yours or being typical consumers of the product or service that you are offering.
Always look for an investor who is in it for the long haul. Your business will not be served well by an investor who is looking to make a quick profit or extract the maximum amount of profit from the investment. You want to find an expert who can help with succession management while keeping the overall health of your business in sight. Though you do not want an overbearing and micromanaging investment partner, you do want someone who is ready and willing to contribute knowledge and share contacts when you need them to.
Image from http://www.igorkalczynski.com/why-your-distressed-business-could-benefit-from-professional-investors-and-turnaround-experts/