Describe your pricing strategy - Investment ready step 4

Your pricing strategy or strategies will say allot about your ability to be competitive within the market. Pricing strategies also have a way of providing insight into your strategic thinking abilities. Many small businesses make the mistake of simply undercutting their competitors, and although this strategy is good in the short term it may backfire when your product cost is higher or not much lower than the selling price. Customers that respond to this strategy will also be the first to leave when new or established competitors respond by also lowering their prices and unless you have the capital backup to fight this type of war, you may be better advised to be competitive in other ways.

Who is your customer and what type of pricing strategy do they respond to. This is the key question you are looking to address.

Is your business investment ready?

Its one thing to look for investment for your business and quite another to ensure that your business is investment ready. Once a potential investor agrees that your idea or business looks potentially viable for investment subject to due diligence being carried out successfully, do your real problems begin or will your business be ready?

A recent client of mine was in this same situation two months ago and because he never really believed that the day will come so soon, he was just no prepared. His company was not investment ready. So how do you become investment ready?

In the next few weeks I will cover the various steps to be taken on the road to becoming investment ready.

Herewith the first two steps:

1) Describe the background and history of your business

This first step in explaining the investment ready status of your business may seem straight forward bur there may be more to it then meets the eye. Points that you may want to cover here is how your business cam into being. What were the difficulties encountered when starting and how were these overcome? What were the barriers to entry you encountered and how difficult may it be for future incumbents to do the same? Have your growth been erratic or stable and what roles has other industry trends plaid in your success up to now?

Investors want to know, not only that your business has a high potential for future growth but also that the business has been able to handle demand and other challenges that show up at your door during the initial stages.

2) Illustrate the Organisation Chart and resumes of your senior management
Potentially one of the more straightforward issues to cover, your organisation chart should be illustrating the flow of communication within the business and the effectiveness of this strategy. In addition the resumes of your senior management team needs to illustrate what your company stands for. Where are your strengths? How does the experience in your team contribute to your competitiveness and uniqueness of product. Is there a good balance between skills, experience and cost within the team?