Investment resources: concept, sources of formation and methods of attracting investors

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

Under investment resources most often means a set of funds of a firm 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 financial resources of an organization or assets of a different nature, which can be directed to the development of individual industries in order to increase further profits. In simple terms, this is the money that a company can invest in business development. In some cases under resources for investment alsorefers to 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 still only at the development stage. Simply put, investment resources are everything that can somehow be useful for the development of the business and affect the growth of profits.

Varieties of resources for investment

Depending on the direction of the firm, the nature of its resources may vary significantly. For example, manufacturing enterprises constantly purchase equipment that can be attributed to investments. In the case of financial institutions, the role of such resources is the money that the company invests in the purchase of securities or currency. Here are just the main types of investment resources of the enterprise, which are distinguished by economists today:

• cash is the most common form available everywhere;
• informed assets are the result of human intellectual activity;
• human resources - skilled workers and regular workers;
• natural assets building materials, land, raw materials;
• technical and tangible assets - new technologies and equipment.

Not all companies have all of the above investment resources. Moreover, some businesses only dream of having equipment or cash that can lead toprofit increase. However, an aspiring entrepreneur should know the basic concepts that he will encounter on a daily basis.

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 public funds. Also, some entrepreneurs attract investors to their company - persons who are ready to provide the company with their funds in exchange for making a 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 an enterprise. Material and technical assets can be purchased at special factories and plants. But for the extraction of natural resources, you will have to literally dig up several tons of land.

How to expand investment capital?

Any entrepreneur must understand that the capital of investment resources must be constantly replenished, because without this the company 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 investment that you plan to receive:

• government –are government subsidies;
• own - finances found in the organization's reserves or savings;
• third party – investments received from individuals and legal entities;
• foreign - money raised from foreign investors and companies.

As soon as you decide 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 to help you achieve your goals.

Create a good business plan

Any investor is primarily interested in making his money bring him profit. No one will invest in a dubious venture that doesn't even have a well-articulated business plan. Therefore, in order to attract investment resources to the company, it is first of all necessary to draw up a competent business plan that can be presented to a private investor or a legal entity ready to provide you with a 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 make the investor confident that with the proper implementation of the project, he 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 safe hands. For thistry to give more specifics based on facts and logic, and not take numbers from the ceiling.

Hire an experienced lawyer

Now you know a lot about what sources of investment resources exist. However, in order to receive money from a we althy investor, it is necessary to conclude a competent agreement with him, which will take into account the obligations of both parties and the pen alties in case they are not fulfilled. For this, it is highly recommended to hire a professional lawyer who knows his business. Be sure that his services will pay off in full when the investor sees a clearly drawn up contract in front of him, without any ambiguities. However, don't go overboard with the paperwork, as excessive bureaucracy puts many people off, including investors. No one wants to spend time studying dozens of different contracts, each of which may have a catch.

Give a quality presentation

In order to get support in the investment resources market, you will have to make an appointment with one or more investors. However, in order for such an event to bear fruit, it is necessary to prepare for it in advance. You need to rehearse your speech well so that investors understand that they are dealing with an intelligent and confident person. Only in this case you will be able to count on their funding.

However, any novice entrepreneur should be aware that the terms of the contract should not be changed to please the investor. You must let your partner knowthat he is much more interested in working with you than you are with him. Do not make concessions that can lead to losses for the enterprise. Otherwise, you risk losing most of the profits due to an investment of a couple of millions.

Know how to look at your project from the outside

The main mistake of novice entrepreneurs is that they cannot give a competent assessment of investment resources. In some cases, the blame for everything is a biased attitude towards a certain area of \u200b\u200bbusiness, and in others - self-doubt. Be that as it may, only experienced businessmen can understand which undertakings will be unpromising, and in which more money should be invested.

Professionals recommend as far as possible to distance yourself from a personal relationship to the enterprise and look at it from the outside. 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, this attitude allows you to get investments, since it will be much easier to interest a partner when you are cool about your business.

Hire an experienced businessman to help you

Quite often, novice entrepreneurs make very stupid mistakes, especially when concluding contracts with investors. If you do not want to be disgraced by ignorance of elementary concepts of housekeeping, then we strongly recommend hiringan experienced partner 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 more experienced than them. As a result, you and your company will become a win-win option for the investor, where you can safely invest all your savings.

Find places where investors gather

Unfortunately, posting "I am looking for an investor" is not the smartest 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 who are ready to invest in a profitable business gather. As a rule, such gatherings take place at various gala evenings, which are quite difficult to get an invitation to, but the game is worth the candles spent on it - you can be sure of that!

Today, various events are very common, at which competitions are held among entrepreneurs. As a rule, the winners of such competitions receive support from we althy people and the right to long-term cooperation. If you can't find what you're looking for at the banquet, at least you'll gain experience by interacting with big financiers and corporate owners. The format of such parties allows young businessmen to show themselves and their products to big businessmen.

Perhaps the state or the bank will help?

Some entrepreneurs outrightrefuse the opportunity to take a bank loan for the development of the enterprise, although such actions can often be very profitable. The snag may lie only in the execution of various documents. Professional businessmen advise those people who plan to receive financing from a bank to register an individual entrepreneurship or become part of a limited liability company, since 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. In this case, it would be extremely unreasonable to try to attract the attention of certain structures - you yourself need to be interested in how to get a subsidy or a cash grant. For example, in the Krasnodar Territory, subsidies are issued for the construction of greenhouse complexes, since the region needs fresh vegetables and berries. Anyone who wants to build a greenhouse on their site can receive funding.

Video and conclusion

As you can see, there are quite a few sources of funding, as well as methods to attract the attention of investors. If the information from our article seemed too little for you or you still have any questions, then be sure to watch a short video that tells all about how to attract the attention of investors.

Don't forget to organize the proper use of investment resources when you do manage to get a sum of money from investors. Otherwiseyou risk slowing down the development of the company for many years, thereby letting your partner down.