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Social Responsibility and Investors

The relationship of corporate social responsibility and investors was studied by Ioannis Ioannou of the London Business School and George Serafeim of the Harvard Business School. The 2010 study was titled, The Impact of Corporate Social Responsibility on Investment Recommendations. As the title suggests, the social responsibility strategies were analyzed from the perspective of their influence on security analyst decisions concerning investing in companies.

The results were clear. The value of socially responsible strategies has risen in the minds of investors. The study also reported that firms seen as socially responsible are viewed more favorably by analysts and the more visibility the better. Social responsibility is value creating.

We tend to think of large corporations as being the only firms that need to be concerned about social responsibility. Unfortunately, many also view social responsibility with a bit of cynicism, believing that it’s a ploy to sell products and services. However, if that were true businesses would only do or spend just enough to attract investors and never go beyond the minimum. Yet even small businesses are found in the community as their employees volunteer time and money to local nonprofit efforts in a variety of areas. They help clean up the environment, raise money for hospitals and special causes and sponsor programs in childhood education and adult job training, to name just a few activities.

Social responsibility is a broad concept that addresses ethical business behavior and sensitivity to community issues. Those issues include economic, social and environmental aspects. All companies can increase their value by addressing the needs of its community stakeholders and by following ethical business practices. When businesses increase value, it’s easier to attract investors. Social responsibility is a win-win proposition.

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Think Strategically and Attract Investors

After a certain point, every business owner discovers they need to search for investors which means they need to start thinking strategically. That’s well and good, but what does it mean exactly to be a strategic manager?

Though it may sound like a buzzword used by business scholars with nothing else to do except pontificate, being strategic is important to any company that plans on being around for a long time. A strategic leader is someone who is forward thinking and anticipatory of both potential problems and opportunities that can contribute to business success. However, being strategic means much more because it implies using that forward thinking to align the business.

Alignment could arguably be one of the most important aspects of strategic management. Think of it like this: You can find investors, but if the business does not have a quality business plan and aligned operations, products and services, you won’t be able to take advantage of the opportunities to expand. Aligning a business to take advantage of future opportunities means preparing for growth and expansion in a planned manner and establishing the support system to ensure the growth can occur in a profitable manner.

Investors will be on the lookout for strategic leadership in a business. They know that a strategic minded business owner is not just running in circles trying to keep the business afloat today. Strategic leadership involves making careful decisions designed to promote business solidity and growth, understanding the needs of all stakeholders and successfully balancing those needs. Above all, being a strategic leader means thinking like investors so that ‘strategic’ really doesn’t just become a buzzword.

More detailed information and useful advice can be found at www.funded.com Created by Mark Favre, it offers expertise and assistance with developing and funding your concept, including a private forum for queries and discussions. If you need access to investors and funding providers, please do check our website.

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Customer Focused Businesses Attract Investors

To sell a business plan to investors, you have some things to prove beyond the immediately obvious like marketing and the period the investor can expect a return on investment. You must also prove that you are customer focused from the very beginning. What does that mean exactly? It begins with a business that has products or services that solve customer problems and then expands from there.

Customer focused business plans attract investors for a good reason. The well thought out business plan that is customer focused finds a good balance between providing quality customer service with the need to achieve a return on investment. Achieving this balance is necessary because a business that is in it for the long haul must meet both goals to survive. In other words, you can’t have great customer service and lose money, and you can’t have poor customer service and a good return. If the latter situation exists, the business has moved to a company focus which means customers are being neglected. Eventually, competitors will get the neglected customers’ business.

For this reason, it’s critical that businesses needing investors prove they fully understand customer needs, can convert those needs into opportunities and have developed strategies to retain customers. The business plan will also need to prove that customers will get value for their money. In other words, the customer should be central to all decision making and planning. When investors review the business plan, they will look for customer focus as well as financial viability. In the final analysis, the two are so tied together that it’s impossible to separate them anyway.

Browse http://www.funded.com for more advice about getting your business funded.