Compound annual growth rate (CAGR) is a useful investment measure of market growth that uses a geometric average to represent the one, consistent rate at which the investment would have grown if the investment had compounded at the same rate each year.
As discussed on this week’s MakingChips podcast, industrial vending has grown immensely in the past decade. These machines help lower operational downtime while improving efficiency by enabling companies to manage their inventory. Access-controlled vending machines also assure employees have the resources they need, when they need them.
Whether you are a provider or user of industrial vending machines, based on the positive predictions found in the Industrial Vending Machines Market Size & Forecast Report, published by Millions Insights, it is a great time to start letting potential investors know how you are taking advantage of this latest breakthrough in automation.
How to Start the Investment Conversation
The idea of finding investors can seem overwhelming. Luckily, according to a recent national study conducted in conjunction with the Wharton School at the University of Pennsylvania, there are investors all over the country looking for opportunities to fund worthy small businesses.
If you’re hesitant as to whether or not funding from investors could be a good fit for your business, ask yourself these few questions:
- Are you established enough beyond an idea?
- Do you have a strong proof-of-concept and potential market whitespace?
- Are you prepared to give away equity and/or add advisory presence to your business?
It is also helpful if you don’t need money right away, since the process can take a while.
Step 2 :
The next step is to take stock of who you already have within your sphere of influence. Again, this may seem intimidating. However, you may be surprised at how many people you know or know of might find your incorporation of industrial vending to be interesting, exciting or, best of all, worthy of investment.
Here is a quick list of potential investor sources to consider:
- Trusted Introductions
- Strategic Networking
- Online Investment Platforms
- Industry Conferences and Summits
- Cold Outreach
Step 3 :
The last step is communication.
In modern times there are multiple avenues that can lead to success. My advice is to vary your approach but always aim to be as personal as possible. Social media platforms such as LinkedIn and Instagram are great for communicating somewhat personal information to a larger audience of followers.
Then again, nothing beats a face-to-face conversation at an industry conference or networking gathering.
No matter what avenue you choose or what communications opportunity presents itself, there is a simple formula for finding investors: have a well-written business plan.
Begin your conversation by introducing the topic of industrial vending and how you are associated with it. From there, you can follow these guidelines to direct the discussion and net interested investors:
Demonstrate the profit potential
The best way to prove industrial vending is viable for our industry, and especially for your manufacturing business, is to use a working model that gives actual numbers, including estimated revenues and expenses.
This isn’t something you will want to do on the fly. Make sure to take some time and do your research. Have these numbers ready so when an opportunity presents itself, you don’t miss it.
Specify the strengths
Again, in order to present industrial vending as a successful manufacturing advancement, it is best to cite statistics from trusted industry reports and news articles that illustrate this point. (You could even refer to the MakingChips podcast or print media!)
However, don’t be afraid to use a personal anecdote or quote from one of your satisfied customers either. Name dropping or tagging the right company or highlighting a specific value can go a long way with the right person.
Lay out your plan
Industrial vending is a new automation technology being adopted at a fast pace. The value of this progress within our industry is indisputed.
As you reach out to potential investors, be sure you’re not just focusing on the broad picture. Include your own history and experience with industrial vending. And if you don’t have specific outcomes to report yet, then at least have reliable estimates.
Remember, investing has a lot to do with numbers.
Still, you don’t want to overlook the personal side of it either. Step back and ask yourself if there is anything else that will convince your prospective investor this new automation will improve your business’s production and revenues?
At the end of the day, industrial vending machines improve efficiency in a variety of ways. Figure out how it’s helping you do business better and start letting people know. You never know who is out there ready to invest. With the right message, data, and presentation, you could be just around the corner from growing your manufacturing business exponentially.