Making Your Home Business an Attractive Investment

Owning a business that you run from home, is both a little daunting and rewarding. You get to work your own hours, be your own boss, deal with clients over conference call software, and also manage your own stock. All of this is great and is quite liberating. During the past few months, we have seen how important it is to be self-reliant if you need to be and running a home business is that in spades. You cut out various middlemen and just contact your customers and give them what they want. However, if you would like to expand your home business, perhaps into a new territory or perhaps, into a small business even, investment is key. You could use your own capital but if you can use someone else’s for a fee, then why not? But, how do you go about making your home business an attractive investment?

Scaling slowly

For a home business, stability really is golden. Investors want to see that you actually have a home business that has longevity. Many home businesses will get trapped in thinking small, some others will try to expand too quickly. But if your home business is slowly scaling up it’s services, slowly expanding it’s marketing reach and slowly growing in revenue, investors will have more confidence in you and your brand.

Scaling slowly is important because you have to show that you can take on the challenges of each growth checkpoint. In the first year, you may only have 100-1,000 customers. In the next year, you could have 200-2,000. Showing less volatility, having a stable cash flow and scaling up your B2B services such as warehousing, storage, packing, delivery, etc, shows the business is maturing and scaling up correctly.

Don’t treat it like your baby

Do not treat your products as a baby of yours. They are not. Although you may feel close to your products, the key is to remember your brand is bigger than just one product. Adidas makes great running shoes, they don’t get attached to one particular line, they just want to provide the best running shoes for marathon runners, sprinters, and interval training, etc. 

So remember that your brand ethos is larger than any product line. Investors will want to see a running ethos throughout the business. Having a presentation of your product line evolution is going to be extremely impressive. Small adjustments and incremental improvements to your products, shows you are aware of customer feedback, you can adapt to the demand and you are always planning ahead.

Check your attractiveness

If you would like to see how attractive you are appealing to investors, doing an underwriting test check could be helpful. For example, underwriters will buy stock of a business when it becomes public (IPO), an automated software that uses machine learning can show you what level of liquidity your investor range would possess on average. But what is insurance underwriting? This is when an insurance company checks the value and stability of a company and automatically knows whether it should give it an insurance policy or not. The better the insurance plan, the more attractive your business appears to investors.

Have a good team

Just because you have a home business doesn’t mean you don’t or can’t have employees. Your employees might also be working from their home office, doing tasks in your dashboard such as designing a marketing campaign, accounting, paying invoices, contacting warehouse and delivery services and fixing issues, etc. 

If you have a good team of employees, you should market them too. Have their photos and profile on your website to show investors, you may be a home business but you have a team that is supporting you.

It’s always difficult to find an investor who is willing to invest solely in you. This is just something reality home business owners are met with. So, if you have the revenue and profit margins to hire a team to work with you, make sure you actually form a team when presenting the image of your business.

Any home business has a chance to find a wealthy investor looking to invest in the next big thing. If you scale up slowly, doing it right, showing stable and responsible growth, investors are more likely to take you seriously. Check how attractive you might be to be insured and thus, the range of liquidity your investors may have. Don’t get attached to your product line, always innovate and improve to meet market demand.

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.