3 Tips for Dealing with Investors and Shareholders
Dealing with investors and shareholders can be a lengthy process unless you know how to deal with them professionally. Let’s discuss first what is an investor. An investor is the person who will allocate capital with the expectaCon of a financial return. As investors in your company they can make investments in equity, debt security, real estate and currency.
A shareholder is someone who owns shares in the business. They also have the potenCal of making a profit or a loss in your business. They can also be involved in the process of elecCng the Board of Directors and also in direcCng the acCons of management. It depends on you as the business owner to determine who will be taking care of these acCons to avoid issues later on. Here are 3 Cps that will help and guide you when dealing with investors and shareholders:
When dealing with your investors or shareholders it is important that you provide only relevant informaCon unless they ask you for your enCre operaConal details. Many Cmes providing informaCon that is not relevant can hurt your business instead of benefiCng it.
When dealing with investors and shareholders be knowledgeable of your financial structure. If you are not knowledgeable of your business then the best thing to do is to assign a contact person who does and who you have authorized to deal with the investors or shareholders. The contact person must know everything about the business and be able to answer such quesCons as: What’s your cash flow? Are there any growth projecCons? What debts are currently oustanding and what is the balance is each debt and expected future payments.
As a business owner you must know every component of your Business Plan from start to finish and your Markets in order to establish an excellent relaConship with your investors and shareholders. The investors and shareholders will be able to make a bePer decision whether to invest with your business or not when they are able to review your Business Plan indepth. Remember that shareholders make profit to grow your business and they can also invest to bring expansion to your business. Hiding informaCon from them is not a good business pracCce.
Keeping everyone in your business informed as to who are your investors and shareholders and what they funcCons are is a good pracCce and to talk about in your group meeCngs.
This post was reformaPed for distribuCon. To read more content from Jeff Ramson, please visit hPp://jefframson.com