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How to Uncover Growth Opportunities with Private Equity

For almost every entrepreneur, growing a business after it has successfully gone through the launch stage is a challenging undertaking. There are so many business facets to be harmonized including expanding operations, scaling the business and maximizing profitability. These activities often put a strain on almost every available resource — from human to financial capital.

Private Equity (popularly known as PE) can help your business achieve growth objectives faster and in a sustainable way. A partnership between management and a good PE firm is initiated with a mutual goal of optimising business profitability within an agreed period of time. The PE firm aims at getting the best return on their investment while the entrepreneur takes the opportunity to achieve his growth targets. Here are three main ways PE can help your business uncover growth opportunities:

Increase capital base

Most start-ups find it hard to get funds from mainstream lenders and when they do, the debt is always at a high cost. Lack of sufficient funds can hamper business growth. PE firms inject capital and offer additional financial support to start-ups to enhance their growth potential. If your business needs funds to expand, a PE firm can provide the required funds. It can also use its extensive banking network to ensure that you get debt at a reasonable rate.

In this light, it is important to partner with a reputable PE firm that will boost your credibility when approaching lenders.

Achieve operational efficiency and focus on profitability

When a PE deal has been initiated, the PE firm becomes an active owner of the business. They bring in the best experts in the industry to assist management in achieving the target objectives. Goodwin is well known for bringing in the best professionals in industry to ensure that the investment made on its portfolio companies achieves a return acceptable to their shareholders. The resulting enhancement of skills enables the business to optimize operations and make use of every available opportunity to become more profitable and achieve growth.

Diversify your business

Most of the opportunities of increasing the top line lie in diversification. Any PE firm is keen on helping companies in its portfolio to expand their product range and enter new geographies that have fast-growth potential. Diversifying a product range and geographical concentration also reduces a business’ exposure. In addition to an increase in total profitability, the business gets better appeal and is able to attract big and more competitive strategic partners.

If your business is currently transitioning from launch stage, there is a lot of value to harness from private equity with regard to growth. You just need to have the right partner and your business will grow to the dream you had when launching it.