Finding investment advice when growing your business
There are two moments in the life of a business when it is truly vulnerable. The first is when it has just started out. The second is when it’s trying to expand. In the former situation, there’s usually lots of support available from government and business mentors. In the latter, it can be very hard to determine where you can find trustworthy advice. If you have limited business experience of your own, how can you best determine how to succeed?
Understanding your options
There are a number of different ways that you can grow your business: expanding your production facilities, taking on more staff, exploring new markets, setting up franchises or overseas branches. One of the most effective, however, is to take over or buy into established businesses. Many companies use investment in this way as a means of broadening their operations without having to oversee multiple aspects of development at once. Because you’re getting involved with already-established entities, the risk is comparatively low – if you choose your investments well. This means doing your research, which is much easier when others are available to help.
Talking to your bank
Business owners too often think of banks as enemies, there to be petitioned for funds from time to time and otherwise always looking for reasons to increase charges. In fact, your bank can do a lot to help you out, because your success is good for it. That’s the very reason why it hesitates to fund ventures that it considers unreliable. Many banks are happy to provide advice to businesses, and although they may charge a fee for this, you can be confident that they won’t work against your interests. They can help you assess how much capital you can afford to invest and ensure that you don’t overextend yourself to the detriment of your core operations.
Networking and mentorship
Businesspeople who have managed a lot of investments, takeovers and expansions in the past appreciate how difficult it can be for those with less experience and are often prepared to help. Use your network of contacts to see if there’s somebody who can help you out. If you can’t find an appropriate person, then get out and about and do more networking. Look for someone whose interests are in a different sector and therefore unlikely to come into conflict with your own. You can also ask questions of experts at many business events.
Business support services
Although there are fewer support services available for businesses beyond their second year of operation, they do exist. Some are organized by federal, state or local government. Others emerge from networks of local or same-sector businesses dedicated to supporting one another. If you’re part of a minority group, then you may be able to find a specialist organization dedicated to helping people like you in recognition of the disadvantages you could otherwise face. If you take advice from multiple sources like this, then you face a lower risk that anyone will successfully take advantage of you – a risk that you do need to be alert to in investment.
Of course, one option when you find yourself in this situation is to seek out the services of a professional investment manager. The more money you have to invest, the more cost-effective this is, but if your funds are limited and you’re still keen to make effective use of them, then you could try Creative Planning, which specializes in smaller-scale investors and charges accordingly. It’s also good at analyzing investor profiles in a very individual way, so it can help you establish exactly what’s best for you and your company. Whatever company you choose, you will be protected by a client confidentiality agreement, and you should remember that the more honest you are, the more appropriate advice you’ll get. Now is not the time to try to make an outsize impression.
When you want a general overview of the performance of different businesses in your own or closely related sectors, don’t overlook the trade publications. They often include useful reviews, company profiles or interviews with key personnel. While the information they provide can be quite generic, it will help you to get an overview of your options, and it can also give you an idea of how other businesses are approaching investment. This is one reason why savvy business owners read trade journals on a regular basis.
Although the process of expansion makes you vulnerable, it’s a necessary step to ensure growth. In the long term, growth will give you a lot more stability. It’s really essential to survival in today’s world. What you don’t need to do, unless you’re pursuing a very specific opportunity, is rush. Take your time, do your research, and the right opportunity will come along.