With consistent reports of a ‘double dip’ recession, regular news on the latest European bailout and banking scandals as well as record lows in the growth of GDP in many of the Western powerhouses, increasing numbers of investors are looking to the East for some investment inspiration.
On the flip side, the consistently strong growth in the East, particularly within the emerging economies of China, India, Indonesia and Vietnam is encouraging more investors to step out of their comfort zone in terms of business deals and financial investment and take a plunge into formerly unchartered territory. Instead of simply investing funds, private equity firms are receiving a crash course in how business is done in the East – particularly within small and medium sized enterprises (SMEs). Getting their ‘hands dirty’ in terms of fostering close personal relationships with the small business owner, taking the time to understand their passion and vision for the company, which they may have started from scratch or has been in the family for generations, and displaying their respect for diverse business practices are just some of the ways in which deals are being made; politics, business etiquette and culture play as big a role as anything else in this climate.
In return, SMEs offer financially safe(r) opportunities as well as a channel into an often closely nurtured sales pipeline amongst a network of small and family businesses; something foreign firms would find extremely difficult to tap into. The potential for high return is attractive, if you are willing to do the ground work.
On the SMEs part, should they wish to be acquired or receive investment; an internal review of processes, systems and procedures is the most productive way to ensure they attract the best deals and benefit the most. Some of the ways in which SMEs can become ‘investor ready’ include:
Optimisation of operations
Are they automated and streamlined? Are they as tightly managed as they could be? Are they up to date and using industry best practices?
Does the CEO have up to date financial data whenever s/he needs it? Can quick decisions be made based on fact rather than feeling?
Does the company have the software in place to enable easy growth? Can the company compete in the international market place? Are sales opportunities tracked and managed efficiently?
Can your company attract and retain the best talent to take it to the next level? Are manpower resources eating into the bottom line?
These are just some of the elements a potential investor will be interested in – how confident are you in achieving these standards?
Blue Ocean Systems comprises a team of Enterprise Resource Planning (ERP) specialists who are dedicated to the success and growth of SMEs through best practice and system automation. Our team of consultants work with SMEs to fully understand their position and their requirements, as well as offer guidance on all areas of the business to provide a customised solution in line with your strategic goals.
Contact us today to see how we can help you become investor ready.