Are you over valuing your small business ?
Startup companies are usually operated by a person or individuals that have put their mind, body, and soul into ensure the success of their company. It is no wonder why these same people, when asked about the value of their company, usually over value it.
And who can blame them. It’s hard to put 10 years into something and not deem it as high value. But when it comes to seeking outside investment, this can cause a bit of a problem.
Investors are looking for a good deal and are rarely looking to overpay (if at all). For investors, companies that have well-maintained account books and profit sheets, top level executives that truly know the business and goals/strategies for future growth are high priorities.
If you are a small business owner and looking for ways to best attract investors while seeking a good price for your company, NuWire Investors has provided a few points that could help out:
- Have a Goal and a Strategic plan: Investors are interested in believable, short and long-term plans that add value to the future of your company. Keep your goals ambitious yet practicable.
- Spread your Customer Camp: Investors are not looking to invest their money in a business that has only a small number of customers or only a single customer who accounts for a large part of your business. Make sure your customer base extends beyond one industry and isn’t to heavily reliant on one company or person.
- View your Business Through the Investor’s Eyes: Evaluate your business, its customer base, the future of your business and the promised profit margins through the eyes of an investor. Understand what sets your business apart and determine if the your selling point is enough to receive funds.
- Lead a Pride of Lions: Prove to your investors that your team is worth investing in, even without you leading them. Make sure you have expert handling sales, finance and operations.
- Eliminate Excess Costs: Create a detailed budget and curb your expense to reduce liabilities. Investors love companies who maximize their cash flow so pay attention to detail.
- Have a Compelling Story: Make your investors your biggest customers. “Have a compelling story of your small business that will pull your investors towards placing their bets on your business.”