How can investors benefit my business?

Considering external investment is important for every business as it can provide a means to innovate, develop and grow. There are many advantages to having investment coming into your company, and it’s not just about providing you with a strong channel of funding.

From monetary to non-monetary advantages, FSB Funding Platform experts look at six different ways an investor could benefit your business.

1. Overcome financial obstacles

The first advantage of having someone invest in your company is that they can help you overcome financial obstacles to develop and grow as a business. This could include getting a loan approved by a bank. While banks are particular about things like credit ratings and savings, investors can be more prepared to take risks.

This means they might choose to overlook things like financial savings, in favour of clever ideas and the potential they think a business has. That’s not to say you won’t have to present your case convincingly and demonstrate real potential, as the best investors don’t invest lightly.

2. Reduced pressure to repay

As an investment isn’t classed as a loan, an investor usually won’t restrict you to the rules of a loan. This means that you’re not usually held to tight deadlines and upfront repayments, with interest added on top. As a result, this can take the pressure off you having to make set repayments, allowing you to focus on your business instead.

3. Valuable expertise

Finding someone who has taken a similar path to you in business can be a valuable asset.  Amongst other things, you can learn from their advice, business knowledge, and experience. You can also learn from the mistakes they’ve made, helping you to avoid you making them yourself. This can improve your chances of achieving long-term success in running and developing your business.

4. It's all about who you know

The right connections can give you what you need to develop your business and make it a success, and an investor can put you in touch with such people. Their past success in business is likely to have led to a collection of strong contacts, some of which could be a benefit to you.

Their decision to invest in your business can also show how much they believe in your company and want it to be a success, which makes them more likely to be happy to pass on some of their top contacts to you for you to meet and build business relationships with.

This could include suppliers or manufacturers who can help streamline your supply chain, consultants to help you launch and market your latest products, or service providers to fill specific skill and talent gaps.  

5. Motivation, inspiration and morale

Working with an investor who has achieved great things in their career can inspire and motivate you to follow in their footsteps and do the same.  As well as supporting you with funding for your business, an investor can provide you with moral support to push forward, build on your progress, and achieve your goals.

6. Improve stakeholder confidence

Lastly, attracting an investor can reflect positively on your clients and customers, giving them confidence in your company and its future. Stakeholders can include owners, employees, investors, competitors, and customers.

Shared from FSB