Every business has its own core competency that can be used to distinguish the enterprise from other commercial entities, which target the same space in the market. A core competency was first defined by Gary Hamel as the harmonization of various resources and skills, which can be used to distinguish the business. This theory has helped the entire business ecosystem as it enables entrepreneurs to determine the core strength of their businesses, and how they can use their current resources and skillset effectively to enhance the business.
Additionally, determining the core competency of your business is crucial if you are trying to obtain a loan from an external source. Venture capitalists will require a plethora of different defining aspects of your business before they even consider funding your company. Besides venture capitalists, even funding companies will need to know the core competency of your business if you apply for any sort of loan or investment. One of the most renowned funding companies is Max Funding as they offer different services including fast business loans, equity business loans, and unsecured business loans. This Australian funding company was founded in 2008 by a group of investors who want to help small businesses achieve sustained growth.
Obtaining a feasible investment is undoubtedly one of the most challenging aspects of a business. If you are looking for one, there are certain key questions which you will need to address before you can successfully obtain a viable investment.
How Will The Investment Help Your Business?
It is important to understand that simply funneling capital into your business may actually do more harm than good. In most cases, the markup or return rates of these investments can be very high, and this constant liability will drag you down unless you are certain that your business will repay the loan back through sustainable profits. Make sure you have a clearly defined forecast of your business and the future earnings that it will be capable of.
Can You Internally Source The Required Capital?
You should also ask yourself whether it is possible to source the required capital through the current operational output of the business. This means that you have to find out if there are any assets which are not being used so you could dispose them accordingly. You can also reinvest the profits of the business with the consent of each stakeholder, especially if you can prove to them that this will be beneficial for the business in the future. You can also try to raise the funds by cutting costs wherever possible, and by streamlining the entire budget of your business to allocate the required capital.
Is Your Business Ready For The Growth?
In certain cases, a business can actually suffer by procuring an investment when they are not ready for growth. Some businesses may only have seasonal demand or they have reached their maturity where sustainability is more important than growth. So make sure you answer all of these questions before you try to procure an investment.