When you’re running a business, it’s important to maintain a good relationship with your shareholders: they provide the investment that keeps your company running forward, and while you will hopefully be rewarding them by increasing the value of their shares, you can also keep things running smoothly day to day with a number of simple tips.
It’s important to begin your relationship with your Shareholders in the right way. Your approach is a chance to set the direction for how your association is going to go: submitting a well written, realistic business plan when you’re soliciting for investment not only demonstrates you have the necessary qualities to deliver on what you promise, but will also avoid nasty surprises for your investors down the line.
Having a well written Shareholder Agreement is important as well. This sets out the relationship between the shareholder and business owner: exactly what each parties’ rights and responsibilities are, and what they can expect from their investment in your company. This can also help to protect from overzealous investors who may wish to exert more control over the direction of your company than you might like.
Meetings and Honesty
Shareholders like to be kept up to date with the developments in your company, especially in a new business, where challenges will be met and overcome quickly, and new leads will be found and acted on in the short term.
To fill this need, and also represent yourself as available and reliable, schedule regular shareholder meetings. With increasing access to remote working technology, it’s possible to hold regular catch ups without having to call your entire set of stakeholders into your office. A conference call or Skype video-conference can have this accomplished without your shareholders leaving their offices.
It’s also important to be honest with them: any new business will have ups and downs, and you may be tempted to downplay a temporary set-back or slow down. In the long term, your shareholder’s confidence will be built up for more by being honest with them and accepting feedback in the early days.
Many shareholders are serial investors. Use your contacts in the business world to find a little out about them. You can anticipate their behaviour and get off on a good foot by catering to their particular needs, and smoothing over flashpoints in advance.