For early-stage business owners, dreaming that they can afford to open and operate a business without any help or external financial backing is quite common. The truth is, unless you have a high budget or the business you are starting has low operational costs, you will need to find funding in order to operate until the revenues will be able to cover the costs.
But here’s where shareholders come into play. Stakeholders are the pillars of a successful organisation and are the ones backing the organisation financially. So, it makes sense to keep them happy in order to secure the future of your organisation. Whatever part of the global industry your business is operating in, keeping your shareholders happy is crucial and here’s how:
Share both good and bad news with your shareholders
Whenever good news comes out, share it with your shareholders. Normally they have great expectations of your enterprise, and it’s obvious that they expect to hear some good news since they’re purchasing shares and backing your business growth.
Make this journey time-worthy by celebrating together when something good is going on. This will help them develop trust and make them feel satisfied and positive about the future of the organisation.
But the success of a business doesn’t just hang onto sharing the positive aspects. Businesses also go through difficult phases, which is why sharing the bad and the ugly aspects with your shareholders is essential. Trust is always important in any business, and sharing bad news will help in building that trust with investors.
Keep them up to date
Shareholders want to know what is happening with the shares they hold and invested in, so it’s crucial to give regular updates about the business’s performance. For shareholders, not being included in regular updates surrounding your business’s financial health, could create complications that can stop stakeholders from investing in your business.
Following a sound shareholder management strategy will help maintain a healthy relationship with your stakeholders. Your shareholders want to know whether they’ve invested in the right business or not and guaranteeing that they have invested in the right place is your duty. Strong relationships will encourage other shareholders and investors to take part in your biggest goal.
Your shareholders want to see tangible results, and while everything runs as it should for your business to develop and grow, you will require great communication with your stakeholders. Keep them informed on development and changes in projections. Although there will be downturns in the company, don’t hide them from them. Your shareholders need to know the reality. Communication, especially when it comes to slumps, could generate more financial backing if investing more will spark growth and revenue.
Show leadership
Shareholders and investors in a company are normally assertive and strong leaders in their sphere of influence. When someone trusts and invests in your idea, they are not just investing in startup costs and operations. These people invest in you. While business potential and profit projections may have heavily influenced their decision, seeing you as a strong leader and seeing your potential is likely what convinced them.
However, your shareholders should not be the only reason for you to show strong leadership. Your customers and staff need to see you as a motivated leader as well, one that gets the company’s most successful results.
Manage their expectations
Before you actively listen to your shareholder’s ideas and communicate successfully, you must manage their expectations. If you have a nicely organised business plan, the predictions for your business should be mostly in control. However, you should also make sure these outlooks are set at a range of high expectations to lower ones. While you may not develop confidence by presenting only the bad and the ugly scenarios, setting their expectations will give you room for some lesser desired results.
When it comes to our personal and work life, we all set expectations. However, it’s crucial as a business owner, you set reasonable expectations for your shareholders.
Use a cap table management software
As your business scales, maintaining an excellent cap table with many shareholders can be a massive challenge. As your business grows, the number of investors and classes of shares increases.
Additionally, more and more rows and columns are necessary. Recruitment of more staff will also ask for more testing schedules and tracking of option grants, which will also require more formulas and sheets. Equity management software is a great tool to save time and to overcome the hassle of adding multiple sheets.
Understand shareholders
One of the best things you can do for your shareholder is to understand they are people just like you. Just because they had the financial means to support your business, doesn’t make them different from you. They are people who are striving to make big investments and want to see success and growth.
Shareholders and investors are not much different from business owners. As a business owner, you should take their feedback and ideas seriously and listen to their concerns.
Though some ideas may seem unreasonable, most shareholders are business savvy and have certain skills that you, as a business executive, have yet to learn or develop. Remember that your shareholders have a stake in your business’s success, so every idea or suggestion they give you is with the business’s best interest at heart.
