Writing a Business Shareholder Letter in Six Steps

John Csiszar reports:

"A business shareholder letter is your chance to communicate directly with your investors. While not a legal requirement, it's usually expected to accompany an annual report. The letter is a chance to give your investors a view of your business straight from your pen...In a nutshell, you should tell your shareholders where you've been, where you're going and why they should be optimistic for the future...Keep expectations reasonable. Your executive career can wind up being short-lived if you constantly promise the world to your shareholders and don't deliver. A key step in attracting and retaining investment support is to make shareholders feel good about owning your stock. If you under-promise in your annual letter, you have the chance to over-deliver with actual results, leaving shareholders feeling good about their investments...Give credit where credit is due. If you're the sole director or manager of your company, you can take credit for the successes of the business. However, if your business has grown to the point where you share the workload with board members or fellow executives, tip your hat to them in your annual letter to let them know they are appreciated...Remind investors how your business operates. If you're a successful business owner, you likely live and breathe your business. Even your most devoted shareholder likely does not. Refresh the memory of anyone reading your letter as to how your business functions, what its purpose is and how it succeeds...Use your letter as an opportunity to list the notable achievements of your company. Justify shareholder interest and value by shining a bright light on your most noteworthy successes...Describe any shortcomings or failures candidly...Address your problems and concerns headlong. Take the opportunity to explain what went wrong and why -- and most importantly, what steps you are taking to prevent such problems in the future...Give your shareholders a taste of your personality. A business shareholder letter is one of the few places where investors can get a real feel for the person running their company. Numbers and charts showing corporate profits are great, but personal outreach to shareholders can help foster a sense of support and devotion that can keep investors engaged for the long haul."