The No. 1 Thing You Need To Give Your Investors In The New Year: Confidence
With the holidays behind us and the New Year already in full swing, there’s no doubt that entrepreneurs have a myriad of goals for the year ahead. And one of those things should be to ensure your investors have confidence in your business.
Because whether your business has just one investor, many investors, or you’re starting to think about attracting investors, ensuring they remain confident with their decision to invest should be one of your top priorities. After all, without their support, you wouldn’t be able to achieve your vision.
4 Ways to Give Investors Confidence in Your Business
Communication Is Key
One recurring message you’ll notice throughout this article? Communication is critical. Communicating with your investors – and communicating properly – can spell the difference between having satisfied investors who want to fund the business further and uncertain investors who are have uncertainty about future investments in your business.
Proper communication means knowing your investor audience and understanding the needs of each stakeholder, as well as the investor group as a whole.
It also means providing routine, timely messages to the entire investment group, similar in format and including consistent information for their review.
Human beings love it when they know what to expect. Keeping communication consistent will make their review of your materials easy and efficient. Even better, anticipating their questions will prevent unnecessary distractions that one-off questions create. And when they do have questions, you’ll find that they are of the thought-provoking and helpful variety. In turn, you’ll open up a channel to a meaningful relationship with your investors, one that will pay dividends both in good and not as good times.
Share The Good News … And The Bad
Building on the theme of communication, it’s important to share your company’s wins – no matter how ‘small.’ Celebrating your company’s successes continues to add a positive spin to your operations and keeps your investors excited about their decision to support you.
On the same note, sharing the bad news when things don’t turn out as expected can work in your favor, too. When breaking the bad news, be prepared to share your plan to solve the challenge, and raise your hand to ask your investors for advice, contacts, and ideas to help you.
This transparent approach builds trust and demonstrates that you are humble and able to ask for help – traits savvy investors look for in successful entrepreneurs.
PRO TIP: Share good news early and often because while consistent, scheduled updates are important, so are the ad hoc updates when they are warranted.
Have Your Finances In Order
As mentioned above, another key to building trust with your investors is providing them with financial updates that allow for quick review and analysis. Like you, your investors are busy and can’t spend hours poring through your company’s financials to figure out what’s happening.
By providing a brief written overview and clean, reliable, and timely financials, you’ll be able to deliver confidence right to their inbox.
Outline Your 2019 Goals With Timelines
Sharing your company’s 2019 goals with your investors can not only help you solidify your plan for the year, but can keep you accountable, too. Granted, it’s easy to set goals for yourself and your company, but hard to follow through and put a plan of action behind those ideas.
So sharing the company goals with your investors and following up on progress each quarter can ensure that you continue to stay focused on your vision and growing your business. This is why your investors got involved in the first place – to see your business grow!
Be sure to include a specific timeline to your investors and – this is critical – stick to it. Our clients often find that a balanced scorecard which translates a company’s strategic objectives into a coherent set of performance measures proves easy and effective. And they’re not alone. In fact, a survey found that 80 percent of organizations using a balanced scorecard reported improvements in operating performance and 66 percent reported an increase in profits.
Creating confidence with your investors means investing time and energy to identify and meet their individual and collective stakeholder needs. It also means telling them more than the standard entrepreneur’s optimistic tale about the company and all of its opportunity.
It means sharing openly, being transparent, and listening patiently when they offer their advice and support. Like any other partnership built on a solid foundation, approaching your investors using these principles will continually remind them why they made the right decision when they placed their bet on you. Is there a better gift than that?