Capital Strategies

Like to open another business and hire people to do work. My concept works. Getting a business loan from a bank these days takes preparation, patience and at least 20% of the cost to purchase the business in your own cash.  The preparation part should include a well developed and researched business and marketing plan...plus financial projections. If you don't know how to do this (or don't want to) find a competent professional to help you.  Accountants, consultants, and business brokers may provide the resources you need. You will need to "paint a picture" for the banker regarding the business you'd like to open or purchase.  Additionally, you'll need to "sell yourself". Prepare a resume with your past relevant experience (relating to business ownership, managment, leadership). Don't go in and ask the banker "How much can I get?"  Figure this out before you go.  Nothing says 'greenhorn' like this question.  You want t...

As a former commercial lender, I'm appalled that bankers are forcing small businesses into bankrupcty rather than doing a workout. According to Business Week, business bankruptcies are up more than 40% over last year. ( see article "As Bankruptcies Surge Fewer Emerge" ) Banks have "fragile" balance sheets right now. Here's why: They reduced their credit standards to follow the crowd. Now they are paying the price. Just like small business owners are paying the price through reduced sales, profits and access to credit. I've personally noticed that the unwillingness to work out of problem situations is especially true of the large banks. The locally owned independent bankers are much more likely to work out payment arrangements with business owners. Probably because the decision-makers live in the community in which they serve. Its more difficult to be hard-hearted when your neighbor, club member or friend is requesting that you help him save his busi...

The banks encouraged small business owners to get into this mess (with easy credit and low interest rates) and they are going to prolong it by cutting limits and raising rates. And there are virtually no other options for small business owners....other than paying cash. And if your clients don't pay for 30 or 60 or more days, then a huge financing gap occurs. That gap, in the past, has been covered by credit cards and unsecured credit lines that banks handed out like lollypops as recently as 18 months ago. I'm not saying each of us aren't responsible for our actions. But business owners make calculated risks. We ask: Should I go into debt to start up a new company? What happens if I fail? And what happens if I never attempt my dream? Every business owner starts out thinking they have the best new idea or service to offer the buying public. If we didn't believe that, no one would go into business. So we take that "leap of faith". We may use a credit ca...

I know that there are business professionals who will guide people to buying a business The only person that knows the right business for you.....is you. But before you start looking for a business, you should ask yourself - What am I good at?  What do I like to do?  What niche needs to be filled (i.e. what are people seeking and want to buy)? Then once you know the answers to those questions, start looking at businesses for sale.  There are several "business for sale" websites that you can view.  Just Google - "buy a business" and start looking.  This will give you an idea of what is currently available. However, if you decide that there is a particular type of business you really like, are good at or believe there is a need for, then you may want to consider approaching a business owner that has NOT listed the business for sale. A good business intermediary (a.k.a. business broker) will be invaluable to you.  How do you know if someone is qual...

Buying or selling a Business Buying or selling a business is complicated.  There is a lot to know and a lot to do.  Before you get started, I recommend you do some homework.  For example, there are numerous books available about how to buy a business.  There aren't as many for selling. Then once you've educated yourself a little, I suggest that you find a competent professional business intermediary to help you.  Why?  Because two or more minds are better than one. And it helps you keeps your emotions in check during the negotiation phase. Don't think buying or selling a business is emotional?  Every decision we make is an emotional one and then we justify it with logic.  A professional intermediary can help you separate the emotion from the facts. If you are determined to do it yourself, there are some resources,but again, buying or selling a business is (besides your home), the biggest financial decision you will make.  Why on ear...

Recently, I was asked what to do about closing a small business. Here's my answer. Hopefully, none of you will have to experience this....but if you do, here's some information to get you started. Hello Jenn: First of all, I am sorry that you have to close your business. Owning and operating a business is tough....even in the best of times. You may consider hiring a business broker to help you sell what is left of your business. But before doing that, please ask yourself the following questions: Did a bank provide financing to startup your business? If so, the bank will most likely have a "first lien position" on all your assets. So when you sell those assets, the funds have to go to the bank first to pay down any of the debt. If not, then you are free to sell those assets. What assets do you have to sell? Inventory? Furniture, equipment? What is the market value (i.e. what do you think it would sell for)? Are you currently in a leased space? If so, make sure you talk...

Don’t Cast Pearls before Swine By Sheila Spangler What does it mean? Here’s my definition. “Don’t give un-paid advice to people who are unable or unwilling to implement the value of that advice”. I met a business owner who has fluctuating cash flow and profits….like many people these days. He has a pretty good enterprise. It is currently cash-flow positive but it has reached a plateau. The business is at a critical juncture. Should we figure out how to dramatically increase sales and profits? Or should we cut costs, like our accountant advises? In this case, “more is better”. Creating and implementing key business strategies, can profitably increase sales without raising expenses. I uncovered the hidden opportunities, identified weaknesses and what to do about them. I laid it out in a comprehensive marketing plan. He loved it! By the way, you may be wondering why anyone would prepare a strategic business and marketing plan. Here’s why. If you want to exit your business someda...