"How PEOs Can Make Your Company More Attractive to Investors During an Expansion"
- Last updated: October 16, 2024
So, your spirits are high, and your enthusiasm is renewed: you have decided to expand to an African nation.
But here’s the big blocker in your path: raising capital.
Investors are notoriously difficult to convince – and can be especially more so when you are pitching for an overseas investment. Not to mention that there is often a negative bias towards Africa, causing a lack of trust.
So how do you work around this?
PEOs. Or Professional Employer Organisations. They are an indispensable tool in your African expansion toolkit.
They offer a badly needed helping hand during expansion. They take care of your payroll, onboarding, taxation, and even compliance duties, sharing in legal responsibilities – but not in proprietorship.
Here are 5 reasons why making the jump to a PEO will attract investors during expansion:
1. Cost savings and scalability
PEOs have access to competitive pricing and service packages that you, as a single entity, simply don’t. An African PEO will give you access to:
- Benefits packages
- Healthcare insurance
- Immigration solutions
- Other benefits
All either at much lower prices than you would get individually, or with more favorable conditions.
Besides, as your business grows and the expansion becomes more successful, you will need to manage the transition from a small company to a larger Organisation. In other words, you will have to manage your company’s scalability.
This can be hard to do because a larger company = a heavier workload.
At that point, you would also have little knowledge about business laws in the African country chosen for expansion… and you would also need to manage the growing workforce.
You risk becoming a jack of all trades and master of none…relegating your development efforts to the background.
A trustworthy PEO will help make the transition from a small company to a larger Organisation a successful one.
Why it matters to investors
- Knowing that your company will be working with an experienced, professional Organisation will help reassure investors’ fears of the unknown. It will also add more legitimacy to the project.
- The cost savings you will make will also show how committed you are to turning a profit.
2. Focus on your core business with an African PEO
PEOs enable you to focus on your core business.
This means that you don’t have to split your time, expertise, money, and resources between business development, internal operations, and administration.
When you outsource to an African PEO, you no longer need to worry about:
- Payroll (hectic ends of month, calculating bonuses and overtime, calculating tax and remitting it to the relevant authorities, administering statutory benefits…)
- HR processes (employee onboarding, meetings, offboarding…)
- Compliance with local law (no more non-compliance fines, paperwork, and no damage to your employer reputation!)
Why it matters to investors
Outsourcing to a professional service provider shows investors that you will not be held back by administrative functions. Instead, you will be able to give all your focus to growing your business and turning a profit.
Partner up with Africa HR Solutions
Africa HR Solutions is the reputable PEO service provider you are looking for.
We serve 50+ countries across Africa and have a star-studded track record, serving Fortune 500 companies and NGOs alike across almost 20 industries.
Curious to see how we can help you make your expansion into a success? Find out more about our PEO offer here.
3. Compliance issues
As part of their decision-making process, investors make risk assessments to determine just what kind of project they are getting into – and what the returns will be for them.
When expanding to a foreign country in Africa, one such risk is compliance. And when compliance issues hit businesses, the impact can be quite severe – with steep fines that undermine expansion efforts and cause losses to investors.
A trusted PEO provider will have the knowledge and expert team needed to be aware of and interpret local regulations, preventing any non-compliance issues from occurring.
Why it matters to investors
Being able to reassure investors that no compliance issues will come your way is a huge selling point.
4. Ability to attract workers through better benefits packages
Another factor that turns up during risk assessment exercises is the question of manpower.
Where will you source talent from, how will you attract and retain them? Thanks to their experience and ability to offer competitive benefits packages among other things, PEOs are incredibly useful to companies that want to ensure that their labour force is stable and well taken care of.
Why it matters to investors
Being able to reassure investors that no labour shortage/high turnover rate issues will come your way is another excellent selling point.
5. PEOs can facilitate M&As
If, during the course of your expansion overseas, your company comes across profitable opportunities to merge with another company or to be acquired by one, PEOs can be of great help. They will:
1. Provide strategic advice prior to M&A
As indicated by Harvard Business Review, HR-related problems account for between 70 and 90% of merger and acquisition failures. An African PEO can help in this situation. By assisting with the verification, screening, optimisation, and integration of both companies in order to promote employee retention, a PEO can help reduce HR risks.
2. Facilitate M&As
Other crucial HR components that the PEO can examine include:
- Training initiatives
- Paid time off regulations
- Payroll management
- Positions held and the chain of command
- Onboarding and offboarding new employees
- Employment agreements and contracts
3. Help you implement a PEO solution
No two PEO solutions are exactly alike – and your needs pre a Merger/Acquisition will also change, requiring a different solution. A trusted PEO can help you better evaluate your needs and come up with customised solutions for you.
Why it matters to investors
It shows that you are prepared for all eventualities and that you have a growth-oriented mindset. This preparedness helps lessen the fear of the unknown.
Why choose Africa HR Solutions?
Africa HR Solutions has a star-studded track record working with large corporations and small companies alike across 52 African countries! Our experience spans the course of over 13 years, so we are experts in our field. We understand your concerns and fears perfectly – and already have the solution for them at hand.
Curious to find out how we can help you reach your expansion goals? Get in touch now with any questions you may have!