Five Tips to Make Small Businesses More Attractive to Private Investors
Greg Stevens of Riveron Consulting is quoted as an expert providing five tips to make small businesses more attractive to private investors in The Five section of the Dallas Morning News.
Stand out from the pack.
Design a product or service that’s difficult to replicate and with strong or growing market demand.
Be organized to withstand scrutiny.
Presenting the business through orderly, defensible records gives buyers more confidence that business plans, financial projections, and leadership are credible. Scrutiny will happen whether you like it or not.
Keep executive focus on growth.
Small business owners often do everything within an organization. They should focus on improving the company’s performance and hire other entrepreneurial-minded people to handle functions such as human resources and sales. Buyers want to know leadership can prioritize and let go of responsibilities that aren’t mission-critical.
Diversify your customer base.
Many small businesses have a strong relationship with one or two main customers. If one customer accounts for more than 30 percent of revenue, a potential buyer may require more detailed contracts, client interviews, or other assurances that the business relationship will survive an acquisition.
Know your buyer’s motivation.
You can increase your value by aligning your business with a buyer’s main motivation. For example, a buyer seeking near-term profit will be more focused on margins, but a strategic buyer may be interested in your company for its revenue or help entering a new market.