During a recent study by the renowned business analysts at Rolandberger, it was found that companies in the chemicals industry represented some of the best investment opportunities. The study concluded that investors in this field received higher than average rates of return and saw capital growth that on average beat all other sectors.

Of course, not all chemical companies are profitable, and not all are worthy of investment. But the study showed that all types of businesses (speciality chemicals, commodity based firms and traders) in the chemical industry outperformed the rest in terms of growth and profits. So what is it that makes some profitable and worthy of investment and others not? How can you make your business attractive to potential fresh money?

There are four main areas of focus:

Leadership

If your business is like most, then 80% of your revenue come from a core of your products or services. Businesses with good leadership have a full understanding of that core. It is their strength and its success or failure will determine the success or failure of your company.

Your business model must be centred on that core business and the company leaders must fully understand that centre of operations.

If you are lucky, then your firm is large and has sufficient market share of your core business to define price-setting mechanisms and influence trends. Examples of this command of the market include Monsanto, 3M and Ecolab.

Future Strategy

A successful business must know what its business model is, where it is today and where it wants to be tomorrow. It must also have a defined strategy of how to get from today’s position to tomorrow’s.

Preferably, the business will include different yet complementing revenue streams. These streams flow from products and services that work together to provide a cognitive whole.

Risk Strategy

Potential investors must clearly be able to see the gains to be made from investing money in your business. Similarly, the risks must also be openly given, so that everyone is aware of the risk-reward proposition.

Execution

To execute your business model, your company must effectively communicate its offers to customers and its strategy to investors.

It must also maintain high standards of processes, and must have systems in place to allow business leaders to focus on the key business functions.

Conclusion

Now that the chemicals industry is seeing growth in many sectors, and has finally returned to a positive position after the shocks of 2008, investors have wised up to the fact that the industry is a good place to put money. Commodity values are rising on Wall Street and the larger firms, such as Dow, are posting bumper profits.

Furthermore, a recent  American Chemistry Council report states that gross exports for chemical products will blossom from $60 billion in 2014 to $123 billion by 2030. So the smart money is looking to invest in companies like yours.

By following investment friendly strategies like those above, you may well be able to expand just as the market for your products is entering the golden years.