Investment resources most often mean the aggregate funds of a company or company that are aimed at expanding the scope of the project or building branches of the organization in other cities. It is easy to guess that most of the money is received from interested parties - investors who invest in a promising enterprise in order to obtain material benefits. Read more about this in our article.
Definition and interpretation
Investment resources are the organization’s financial assets or assets of a different nature that can be used to develop individual industries in order to increase further profit. In simple terms, these are the funds that a company can invest in business development. In some cases, resources for investment also mean mechanical and tangible assets that directly or indirectly affect the development of the enterprise. This category includes equipment, production facilities and even various technologies that are only at the development stage. Simply put, investment resources are all that can at least somehow come in handy for developing a business and affect profit growth.
Varieties of resources for investment
Depending on the direction of the company, the nature of its resources may vary significantly. For example, manufacturing enterprises constantly purchase equipment that can be attributed to investment. In the case of financial institutions, such resources are cash that the company invests in the purchase of securities or currencies. Here are just the main types of investment resources of the enterprise, which are allocated by economists today:
- cash is the most common form available everywhere;
- informed assets - the result of intellectual activity of people;
- labor resources - skilled employees and ordinary workers;
- natural assets building materials, land, raw materials;
- technical and tangible assets - new technologies and equipment.
Not all companies have all of the above resources for investment. Moreover, some enterprises only dream about the availability of equipment or cash, which can lead to increased profits. However, a novice entrepreneur should know the basic concepts that he will face daily.
Formation of investment sources
It should be understood that the formation of an investment resource directly depends on its type. For example, monetary assets can be found in the owner’s own savings, enterprise reserves, financial institutions and state funds. Also, some entrepreneurs attract investors to their company - individuals who are ready to provide the company with their funds in return for profit on certain conditions.
As for the sources of formation for resources of a different kind, they can be very different. For example, to attract labor resources, you can use the labor exchange or advertising on television by submitting an advertisement for hiring personnel for the enterprise. Tangible and technical assets can be purchased at special factories. But for the extraction of natural resources will have to literally dig a few tons of land.
How to expand investment capital?
Any entrepreneur should understand that the capital of investment resources must be constantly replenished, because without this, the enterprise will simply stand in one place and stop developing. However, in order to attract the attention of investors, you must first decide on the type of cash investments that you plan to receive:
- state - represent the subsidies that the state gives;
- own - finances found in the reserves of the organization or accumulations;
- third-party - investments received from individuals and legal entities;
- foreign - money attracted from foreign investors and companies.
Once you have decided on the type of cash investment, you can begin to attract the attention of a private investor or company. In the following sections, you will find some tips based on human psychology that will allow you to implement your plan.
Make a competent business plan
Any investor is interested first of all in making his money profit him. No one will invest in a dubious enterprise that does not even have a clearly defined business plan. Therefore, to attract investment resources to the company, it is first necessary to draw up a competent business plan, which can be presented to a private investor or legal entity that is ready to provide you with a cash loan.
What points should a good business plan take into account? First, at the very beginning, you should talk about the relevance of your business in order to arouse investor confidence that with the competent implementation of the project, it can begin to make a profit. No one will invest in the manufacture of typewriters or the construction of a residential complex in the countryside. In addition, it is important to convey to the investor that his money is in good hands. To do this, try to give more specifics, based on facts and logic, and not take the numbers "from the ceiling".
Hire an experienced lawyer
Now you know a lot about the sources of investment resources. However, in order to receive money from a wealthy investor, it is necessary to conclude a competent agreement with him, which will take into account the obligations of both parties and the punishment, if they are not fulfilled. To do this, it is strongly recommended to hire a professional lawyer who knows his job. Be sure that its services will pay off in full when the investor sees a clearly drawn up contract in front of him, without any ambiguities. However, do not go too far with the documentation, as excessive bureaucracy repels many people, including investors. No one wants to spend time studying dozens of different contracts, each of which may have a catch.
Make a quality presentation
In order to get support in the market of investment resources, you will have to make an appointment with one or more investors. However, for such an event to bear fruit, it is necessary to prepare for it in advance. You must rehearse your speech properly so that investors understand that they are dealing with a smart and self-confident person. Only in this case you can count on their financing.
However, any aspiring entrepreneur should be aware that the terms of the contract should not be changed for the sake of the investor. You must make it clear to your partner that he is much more interested in working with you than you are with him. Do not make concessions that may lead to losses for the enterprise. Otherwise, you risk losing most of your profits from investing in a couple of millions.
Know how to look at your project from the side
The main mistake of beginning entrepreneurs is that they cannot give a competent assessment of investment resources. In some cases, this is due to a prejudice towards a particular area of business, and in others to self-doubt. Be that as it may, only experienced businessmen can understand which undertakings will be futile and which should be invested more money.
Professionals recommend as far as possible to distance oneself from a personal relationship with the company and look at it from the side. If you learn to notice the shortcomings of your project and take into account its main advantages, you can easily develop a business strategy with which you can get rid of all competitors. In addition, such an attitude allows you to get an investment, since it will be much easier to interest a partner when you treat your business calmly.
Hire an experienced businessman as an assistant
Quite often, novice entrepreneurs make very stupid mistakes, especially during the conclusion of contracts with investors. If you do not want to be dishonored by ignorance of elementary concepts of housekeeping, we strongly recommend hiring an experienced partner to help you, who will solve complex problems for you and advise if necessary. If an investor sees that there are competent specialists in your team, then he will subconsciously think that you are several times higher than them in experience. As a result of this, you and your company will become a win-win option for the investor, where you can safely invest all the savings.
Find the places where investors gather
Unfortunately, to advertise "I am looking for an investor" is not the most reasonable option, but finding a business partner may not be as difficult as it seems at first glance. It will be enough to know a few places where the owners of large companies and investors gather, ready to invest in a profitable business. As a rule, such gatherings take place at various gala evenings, which is not easy to get an invitation to, but the game is worth the candle spent on it - you can be sure of that!
To date, various events at which competitions among entrepreneurs are held are very common. As a rule, the winners of such competitions receive support from wealthy people and the right to long-term cooperation. If you can’t find what you were looking for at the banquet, you’ll at least gain experience communicating with large financiers and corporate owners. The format of such parties allows young businessmen to show themselves and their products to large businessmen.
Perhaps the state or the bank will help?
Some entrepreneurs flatly refuse to take a loan from the bank for the development of the enterprise, although such actions can often be very beneficial. The catch can only consist in the execution of various documents. Professional businessmen advise starting an individual business or becoming a part of a limited liability company for those who plan to receive financing from a bank, as financial institutions are especially willing to issue loans to such structures.
Also, a significant part of entrepreneurs do not even suspect that they have the right to receive funding from the state. Trying to attract the attention of certain structures in this case will be extremely unreasonable - you yourself need to be interested in how to get a subsidy or a money grant. For example, in the Krasnodar Territory subsidies are given for the construction of greenhouse complexes, since the region needs fresh vegetables and berries. Anyone who wants to build a greenhouse on his site can get financing.
Video and conclusion
As you can see, there are many sources of financing, as well as methods to attract the attention of investors. If the information from our article seemed to you too little or you still have any questions, then be sure to watch a short video that tells everything about how to attract the attention of investors.
Do not forget to organize the proper use of investment resources when you still manage to get a sum of money from investors. Otherwise, you risk slowing down the development of the company for many years, thereby summing up your partner.