Your shareholders are the people who are in charge of making sure that your business has money to spend. They are the ones who invest, so you want to keep them as happy and satisfied as they possibly can be.
Distribute Shares Fairly
First of all, you need to make sure that you are distributed shares in the correct way. You need to make sure that you organize share sales in a way that is consistent and fair for everyone. One of the most common ways of doing this is simply making sure that one unit is sold at a fixed price. That price is usually kept low, and then units can be sold in high or low quantities depending on how much the investors wants to put into the business. You will then also need to oversee share transfers in a competent and secure way. There is help and guidance online on how to transfer shares in a Ltd company. So, inform yourself before taking any steps.
Make Strategic Long-Term Decisions
When you have investors that need to be kept satisfying, it can be tempting to make short-term decisions. When you are achieving short-term results, it looks good to investors. But that doesn’t mean that you are necessarily doing the right thing for them in the long-term. Sometimes, you have to forego short-term advance in order to create value for investors in the long-term. This is what really matters to investors, so don’t fall into the trap of doing eye-catching things. They will thank you later on if you manage to give them a big return on the money they invested.
Communicate with Shareholders
Whether things are going great or going terribly, shareholders want to be kept in the loop. If you don’t make sure that you communicate information to them consistently, they will become frustrated. And the last thing you want to have to deal with is frustrated shareholders. Many business owners things that it can be costly to divulge delicate information to investors. But they are the ones who are putting their money into the business, so it’s only fair that they know how it’s performing. You should give them a detailed monthly report that shows they what has been going on during the last month.
Return the Cash When There Are No Value-Creating Options
Sometimes, businesses are cash rich and don’t have many value-creating opportunities available to them. Rather than just stashing away investor money at this time, it’s much better to return that money investors in the form of dividends. At times like those, it’s the perfect time to do it, so there is no sense in putting it off. You could also offer them share buybacks if you don’t think you need their money at this time. They can then take their money and invest it elsewhere until you want to grow your business and offer them the chance to make money again. This is just a simple way of dealing with investors in a way that is honest and open.
