A New Dynamic : Working With Shareholders
In 2013 I decided what my software company eFiling needed was a little bit more than what I had to offer on my own. The past year has been a very busy year, lot’s of change and lot’s to do. So I thought I’d share some things I’ve learnt about working with a new dynamic of having shareholders in your business.
Bringing in external shareholders was quite a tough decision to come to, because up until that point everything I have done I have done myself. I’ve never been accountable to anyone but myself, and all decisions have rested with me. The reason this was a tough call was because I was acknowledging that for this business to achieve the targets I had set I needed skills I didn’t possess. I also identified that this business has real opportunity to be something very big, so if I want to realise that vision I need to give the business every possible opportunity to do that. If that means selling some shares in the business to bring in expertise I don’t have then that is the right thing to do for the business.
Some things which I’ve come to realise despite knowing it already before committing to the deal I’m going to cover here.
It can be quite a surreal feeling being accountable to other people in your business. After being in charge of everything, having other people who own a stake in your business and realising it is part their business too, makes you challenge yourself on decisions you make. This challenging makes you ensure your decisions are right for the business and not what you may just want to do for yourself.
There is more to this accountability too, in that reporting to your shareholders and reporting back to the board meetings. These processes help to give you direction in your business, what have you been up to and what have you achieved. Are you on target?
Not Being Alone
Being the owner of a business can be a very lonely place. This is a common saying you will hear many times, and it’s a bit like being a parent for the first time. Until you have actually lived it you never realise quite what it is like until you are there, and only then do you realise how life changing it is.
Having investors into your business, assuming it is the right investors, brings with it extra support and comradeship from like minded people who will understand your position and support you within it. They will support you at times when you may question yourself, and bring with them extra expertise and knowledge when needed.
You’ve surely heard the expression that Two Heads Are Better Than One? That applies when bringing in investors to your business, this is a decision process you should go through when seeking your investment. What can these people bring with them beyond just some money. If it was only money you need then I’d suggest putting your home up for equity and visit the bank. With an investor you should be looking at what expertise they bring with them, are they a good fit for you and your business. Then use their additional knowledge, learn from them and use them. They will have just as much interest in your business succeeding as you, and if you have a challenge in your business you don’t know how to handle they will be there to support you and the business.
This is just a few of the reasons I chose that it was right for my business success to bring in two investors who took posts as non-executive directors. So if you feel your business is investable and it is viable, and has a great opportunity ahead of it, and there are gaps in your skills which could be filled by some investors, then selling some shares in your business to the right investors could be the right decision for you.
Now choosing who the right investors could be is a challenge in itself.