4.4 Prepare Report Cards for Investors
A good way to help investors see how the management of your company
has evolved for the better is to prepare a report card on each of the
major business functions. These report cards will be a synopsis of key
management functions over the past four years. Here are some points
to consider:
- Prepare customized tables based on our sample
report cards for each major management function, as the basis
for a review of your past performance and as a catalyst for discussion
at your next management meeting. Present these to the investors.
- Be prepared for some tough questioning. To help you out, we've listed
some key questions investors might ask at the end of each table in
the sample report cards. Your answers will help to convince investors
of your management team's effectiveness.
Sample Report Card on Marketing/Distribution
Marketing/distribution means moving your goods and services from your
plant to the end users. It includes market research and analysis, pricing
strategies, advertising and promotion, sales strategies, sales results,
distribution channels, and customer response.
Sample Report Card on Production/Operations
Most expenses of production-oriented businesses are incurred at the
production level. Buying and transporting raw materials and the costs
of production can account for up to 80% of total costs. So, it's important
to use break-even analysis to show profit performance and the relationship
between revenues and costs (fixed and variable).
Sample Report Card on Accounting/Finance
Investors realize that finance affects all segments of your business
activities. They want to be sure about the accuracy, consistency and
reasonableness of your information, and to see that your reporting system
complies with generally accepted accounting principles.
Sample Report Card on Research and Development
Companies invest in research and development (R&D) to find more
cost-efficient manufacturing methods and ways of improving the quality
of their products. R&D helps your company to maintain a competitive
edge and remain current technologically. It also acts as a signal to
investors that you and your team are committed to growth and success.
Sample Report Card on Human Resources
Good human resources management can easily provide competitive advantages
for your firm by helping you attract and keep high quality, highly productive,
andloyal employees and managers. Good human resource management includes
effective policies and a good track record in salaries and compensation,
recruitment, performance appraisal and training and development.
Do I really have to provide all this information to an investor?
Yes. Investors and risk capital firms usually have a responsibility
to other people who are investing behind the scenes. The more thorough
you are at the outset, the more confident potential investors will be
in your management team.
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