Friday, January 13, 2017

How Micro Cap Companies & Penny Stocks Can Take Advantage of The 3 P's of Business

Penny stock companies and micro cap companies are just like any other company; except they may have gone public to early.  Many penny stock and micro cap companies are looking for funding, new shareholders or volume in their stock.  Their eventual goal is constant liquidity which brings in more institutional investors to buy into their company. 

Let's keep it basic.  Finding investors for a public micro cap company works the same as finding investors for any business.  The investor needs to believe your story and business model AND needs to believe that the management team in place can pull of the business plan presented if they acquire more investment dollars. 

The 3 P's of Business

  • People
  • Product
  • Process
People: You can have a flawless business plan but if you do not have the team to execute the business plan than you will be left with a hole in your plan.  Many investors glance over the business model/plan and skip straight to the management section of your presentation to see if the team has the resume or experience to do what you are proposing will be done with investor money.  And sometimes they don't care at all about the business plan or idea.  In comes the analogy "Bet on the jockey not the horse."  If Mark Cuban or Jeff Bezos retire from their current position and seek investment money from a venture capital firm... you better believe that the group of prospective investors are taking into account the past successes of these gentleman. 

Pro Tip: If you are looking for funding, putting together a pro-forma management team (one that will be activated upon funding) may help your public company, startup or business idea.  A team of 1 or 2 will have a harder time getting large sums of funding versus a well rounded team with experience within a certain sector or industry.

Product: Regardless of what industry or business you are starting you will need to sell something.  Whether you are selling a service or a physical product or even have a SAAS model... this can all be classified as a product (yes services can be classified as a product, at least for this example).  The more polished your product the better off your company will be to succeed.  The better the product, the better the sales and the better the sales the better your prospects are to grow, scale, find investors, attract talented team members, etc. 

Process: This is also called a business model.  Process is defined as "a series of actions or steps taken in order to achieve a particular end."  A business model can be described as a repeatable set of steps that produce a profit for your business.  When companies are looking to scale their business, understanding what components need to be repeated is critical to the businesses success.  The process of how a company achieves a profit must be able to scale, in other words the company business model (process) must be able to cope and perform under an increased or expanding workload.

Our MicroCap ProTip Points
  • If you attract the right people to sit on a penny stock, microcap company or even startup the company will thrive. 
  • A better product will always win the marketplace and microcap companies must be innovative and well positioned (branding, pricing and supply-chain pipeline) to compete effectively.
  • The process in which you decide to make revenues must be able to be repeatable and streamlined for growth. 
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About the Author: Nicholas Coriano, JD is a Business Consultant, at Cervitude Intelligent Relations, which specializes in Investor Relations for companies valued under $1 Billion USD.

About MicroCapCompany.COM: A blog focused on penny stocks, microcap companies, investor relations, startups and business strategies & tactics.   If you would like to advertise on The Blog, click here. 

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