Forbes: How To Know You Are Ready For The Next Big Step In Your Business
Full Article: https://www.forbes.com/sites/forbesagencycouncil/2017/10/02/how-to-know-you-are-ready-for-the-next-big-step-in-your-business/#19e8ed742c8f
In my time as one of the investors on CNBC's Cleveland Hustles, I had the opportunity to see dozens of businesses that were seeking investment. Business owners from all over came to pitch to me and the other investors. It was a unique experience: to seek out and find the best businesses to help revitalize a neighborhood, create jobs, and ultimately impact our community. While I was only able to pick a handful to negotiate with, I was able to catch some common trends.
The investment process of every business varies depending on company size, needs, vision, goals and other factors. Immediately reaching out to an investor might seem like the logical route, but are you prepared to do so? It might be a good idea to take a look at your current operations and decide if you really are ready to take your business to the next level. While investment helps, it's best to ensure that you fit the following criteria below to assess if it's the right fit for you.
You’re suffering from growing pains. No matter the size of your business, as you scale, it is inevitable that you will deal with growing pains. At that point, it might be necessary to seek out investment options, especially if months go by and you’re still spending more time putting out fires rather than working towards your company goals. As your company grows, you may see an increase in sales, but is that manageable with your current business model? Whether it's assistance on providing working capital, guidance and mentorship or helping seek out strategic partners, investors can help relieve the growing pains of your business.
You need more people. If you’re doing everything on your own and are ready to build a team of people, working with an investor is probably the next step you want to take. Perhaps you’ve spent months wearing several different hats but realize hiring more employees is inevitable for moving forward. An investor would not only be giving you the capital required to hire additional employees but also help assess who is best fit to work alongside you. Not only that, but chances are they’ve been in your shoes before: An investor most likely has been through the hiring process and understands how to go from being an owner to delegating duties.
You can’t keep up with demand. Do you find yourself struggling to keep up with the needs of your business? Often you will know you are ready for your next step when you are unable to maintain the balance of supply and demand. Human capital isn’t the only component investors can assist with -- they can also help you get funding for expansion opportunities to allow growth for your company. Remember, a company cannot be a single-handed effort; bringing in key partners or investors to help further your goal can push your business to new heights.
You need a mentor. A majority of investors want to do more than just fill the financial constraints of a growing business. They are looking to mentor and create a mutually beneficial partnership. It is understandable that you might be apprehensive about giving up a part of your company to an investor, but often you will receive a plethora of secondary benefits that might be more meaningful than just the investment itself. Apart from giving you savvy advice, investors can help train your team members, offer various services and open doors for networking opportunities. It's important to me to provide in some capacity to my investments rather than just sitting back and not taking some sort of active role.
Overall, while they may be basic, these are the foundations to guide you on your way to seeking investment. While it is a long and arduous path, it's often one that many entrepreneurs must face when it is time to grow.