Adding Value to Your Business: 6 Reasons to Consider Private Equity Investing
In the past few years, private equity has gotten somewhat of a bad rap. Some view the various private equity firms as “takeover” organizations that buy a business, break it into smaller portions, and then sell what’s left. While this may have been the main play in the past, when there were only a few firms, today, the total number of PE firms has grown considerably. As a result, their growth strategies have evolved, too.
Today, PE investors, like the services available at bswllc.com, are making acquisitions in the lower middle portion of the market and are interested in adding value. In most cases, they aren’t going to purchase a business unless they have a plan in place to accelerate or contribute to current and ongoing growth. For those who still aren’t sure if using a private equity investor is a good idea, keep reading to learn about the specific benefits offered.
- Cash Infusion
Private equity groups have very deep products. They can provide the needed financial resources to fuel company growth. The firm partnered with may provide the capital that’s needed to renovate a business, purchase new equipment, or invest in new marketing strategies. The goal of this is growth.
With private equity, a business can access the talent it’s lacking. These are usually hands-on organizations that will help business owners achieve new goals and maximize value. They offer experts who can work alongside the core team to achieve the success desired.
There are some PE groups that hold mastermind events each year. These are created for company leaders and CEO, and the sessions represent an opportunity to share best practices while hearing emerging trends. A quality PE firm is a business’s path to an all-new community of connections and peers.
- Management Incentives
If a business is searching to reward their management team, one way to do this is with private equity. Most PE investors want to ensure the management team is going to stick around. To make this happen, they may be willing to offer generous incentive programs.
- Proven Returns
Creating value is something modern private equity firms are experts at. In fact, a recent study showed that up to two-thirds of all deals with private equity firms resulted in a minimum of 20 percent in annual growth for the company that was purchased. Investors were winning too, as private equity has outperformed stocks by up to four percent in the past two decades.
- A Commitment to Success
Modern PE firms have a vested interest in ensuring the business does well. If a PE firm invests in or buys a company, it is going to be committed to ensuring it succeeds. After all, if the business fails, they lose money, which is the complete opposite of the goal of this type of investment.
Remember, when it comes to private equity investments, there are more than a few factors that must be considered, including finding the right company. Take some time to consider the options to find the one that makes the most sense for the business in question. Being informed and understanding what private equity investments have to offer can help business owners understand why this is a smart move that may spur the company to even more success than they believed was possible.