Small business strategies for obtaining capital and expansion

Small Business Obtaining Capital to Expand Operations

Funding is very critical to achieve a business objective. Ability to have access to the required funding will assist a firm to achieve the following business goals:

Ability to achieve business objectives

Ability to achieve a short-term and long-term planning

Assisting in raising additional loans from banks to achieve business objectives. (Allebach).

KMG Chemicals is interested to raise funds from prospective investors for its business expansion as well as enhancing other business objectives.

Fundamental objective of this report is to provide the strategies that KMG Chemicals could use to convince prospective investors.

Overview of KMG Chemicals

KMG Chemicals is a small business organization dedicated in producing and distributing specialty chemicals to various customers within and outside the United States. The company business strategy has consistently enhanced shareholder's values and the company specializes in Wood Treating Chemicals and Electronic Chemicals. Recently, the company is interested to acquire additional funding to enhance its business operations. Thus, KMG will use this report to convince prospective investors the major benefits investors are going to derive from investing in KMG.

Benefits KMG will offer to Prospective Investors

KMG history of success is one of the major reasons to invest in the company. Over the years, the company consolidated strategy has consistently enhanced shareholders values. Typically, the company has been able to enhance its profitability through generating positive cash flow in the last 5 years. Since the company has been established in 1986, KMG has become a leading provider of chemicals for the different industries making the company to become the manufacturer and supplier of high purity electronic chemicals. Over the past 10 years, the company has been able to increase the annual rate of KMG's shareholders equity by 14%. Moreover, the company has been able to increase the annual rate of diluted earning per share by 12%.

Additionally, the growth opportunity that the company offers is one of the major reasons to invest in KMG. Forbes reveals that KMG Chemicals is the 95th best small business company in the United States. Over the years, the company market capitalization has grown to $205 Million and the company has recorded the sales of $279 Million at the end of the physical year 2011. The company has also recorded a remarkable growth opportunities in electronic chemical which assists the company to enjoy markets advantages in the semiconductors sector. The company also enjoys market opportunities within automobile industry, and airplanes industry because of the electronic chemicals that KMG provides to these sectors. Additionally, KMG enjoys market opportunities within the smart phone industry.

More importantly, the company has recorded an organic growth results by expanding into new geographical market. Thus, KMG has been able to enjoy market expansion and maximize economic returns through integration and acquisition of other businesses.

More reason to invest in the KMC Chemicals is a strong financial performance that the company records over the years. Overview of the company financial records within the past 5 years reveals that KMG has been able to increase the company financial data. For example, the company has increased the net sales by 6.6% between 2011 and 2012. The net sales at the end of the 2011 fiscal year was $273 million while the net sales at the end of the 2012 fiscal year increases to $273 million. Moreover, the diluted earning per share increases by 51% from $0.82 in 2011 to $1.24 in 2012. Moreover, the company has been able to increase its net cash from operating activities from $12.7 million at the end of the 2011 fiscal year 2011 to $25.2 million in 2012.

Moreover, the company has been able to increase the shareholder's value over the years. Typically, the company records ROE growth of 14% and EPS growth of 26% at the end of the fiscal year 2012. The company has been able to increase its total assets within the past 5 years. For example, the company total assets in 2011 were $168 million while the total assets increased to $178 at the end of 2012 fiscal year.