What to Do When a Cash Infusion Is Not Enough to Grow Your Business
Watching your business grow is a beautiful thing. In the early stages, growth often occurs organically and at a manageable pace. Then the day arrives when you see new possibilities. After years of slow, steady growth, you believe there are real opportunities in the market to scale the business.
Scaling a company is a complex process. Business owners should give careful thought to what they can handle with their current resources and where they need outside expertise and assistance.
But it's not just financing. If you've taken your company as far as you can on your own and need industry know-how, business expertise and capital, a smart option may be to partner with a private equity firm Here are two ways to tap into outside investors outside of borrowing power:
Utilize outside investor operational know how.
When you scale a business, the operation can grow in leaps and bounds and old processes and procedures may not work best. Finding an investor who understands your business and industry, and who knows how to enhance business operations, can prepare your business to meet expanded demand. Many investors have owned or invested in companies similar to yours, so they know what to expect during the growth process.
The right capital partner can also help improve efficiencies and reduce expenses in your business. You can benefit from the investor's vast experience developing other businesses and the proven, sophisticated processes they have developed over time. Improved efficiencies from equipment, technology, labor, vendors, logistics and more can contribute significantly to your bottom line.
Investors who specialize in growing middle-market businesses are skilled at developing new distribution channels for products or services when appropriate. When you create new, viable channels, new customers will follow and your business grows faster.
Tap into outside investor connections.
An investor who has spent years working and connecting in your industry can be an invaluable resource. They know how the industry works, stay on top of current trends and may have relationships and partnerships in the space. This could include trusted suppliers they can leverage to reduce costs or potential employees who give your company the edge required to scale. They may also have grown companies and has industry connections may also help facilitate a synergistic or strategic industry partnership.
Bringing the right players together can allow your business to scale more quickly and grow larger than would be possible on your own.