What is an investor? An investor is a person or firm that has invested in a small business or venture and is interested in that business or project’s success or failure. When it comes to small businesses, a business can rarely get started or continue to operate without investors. As the owner, you are the ultimate investor; however, you must keep other investors happy because unhappy investors can trigger challenges and eventually affect your business.
Some of the adverse effects are continuous communication that is excessive and distracting, asking for changes within the business that cause setbacks, and issues between the investors and key staff. Here are six steps to keep your investors informed and satisfied.
Communicate
The truth is communication is key to every relationship in your life. Your relationship with investors is the same. If you have frequent and important contact with your investors, they will have no cause to be excessively involved in the company. When connecting, it is also essential that you are transparent and honest, even when you may need to deliver bad news. Most investors appreciate rare setbacks or problems, but they will often stick with you through good times and bad if you are upfront and communicate clearly.
Actively Listen
Investors will have ideas and suggestions. Even if you don’t use their suggestion, they want to feel like they have an influence, and it is being received. Investors are interested in the business’s total triumph; hence, they should be able to interject ideas and views. Actively listening is beneficial to the owner because some of their proposals may fix a problem, grow the company, or inspire growth and innovation. Keep In mind that investors are in it for the return on their investment, so they will continually be coming from a place with the business’s best interest in mind.
Manage Expectations
Managing expectations is directly related to the economic outcomes of the company. It is also about managing opportunities for connection, communication, and the investor’s direct interest in your business. Though it would be a perfect world if every business collaborator invests and is a silent partner, that is commonly not how it is in the real world of the small business. Managing expectations will ensure you and your investors are on the same page and avoid any surprises.
Strong Leadership
Investors ought to see powerful leadership within your company. Regardless of interaction or management of expectations, if your leadership is weak, no talking will overcome that with the investors. An investor needs to feel their investment will pay off with an owner who knows how to lead the business to make a profit and be successful.
Have a Service Level Agreement
Like managing expectations, a service level agreement is a way to outline your and your investor’s awareness of what is expected to be produced. Having an agreement on production and return on their investment will ensure no one is unclear on the objectives.
Investors Are People
We need to remember that investors aren’t some unrelatable individuals. They are people who have an interest in your company, just like you have as the owner. If you keep that mindset, it will make it simpler to look out for their benefit. Handle them as you would want to be handled if you were the investor, and they were the owner. What would you need to be happy? What information would you want to know? What would you expect of yourself?
The bottom line is you and your investors carry the same goals and needs when it comes to your business. Taking these steps will ensure that your investors are happy, and the relationship remains mutually beneficial.
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