10 Things I Know About...Small-business capital
Anthony Price, CEO, Lootscout
10) Develop a business plan. A business plan doesn't have to be long, but it should provide a road map for where the business is going. Is the business model viable? What is the unique selling proposition? How is cash generated and when?
9) Know your credit situation. You can obtain a free copy of your credit report once a year from the three major credit bureaus at www.annualcreditreport.com. Pay the fee for your credit score.
8) Do your homework. There are countless ways to finance a business – including debt and equity – but not all are created equal. Invest the time to learn what capital options are best for you.
7) Debt is not your friend. Especially if you're a startup or struggling business, debt is not your friend. Capital that will harm cash flow should be avoided.
6) Assemble the paperwork. Make sure you have three years of business tax returns, an interim profit-and-loss statement, balance sheet and future projections for the business.
5) Build your team. Business success rarely is achieved alone. Build a team that includes an accountant, banker, lawyer and successful business owner. Always network.
4) Don't wait until the last minute. On average, it can take 30 to 45 days to get capital from credible sources. If you wait too long, you may permanently harm your business.
3) Start with your local banker. Talk to your local banker. If this is not an option, learn about local and state economic development programs to help small businesses. Visit www.score.org.
2) Raise friendly capital. Family and friends are a great way to get low-cost capital at reasonable terms. Make sure you create a promissory note to be signed by all parties. Read “The Crowdfunding Book” by Patty Lennon.
1) Read the fine print. If you do receive an offer for capital, make sure you read the fine print. The old saying is true: The devil is in the details. Don't be afraid to negotiate.
Anthony Price is the CEO of LootScout, which counsels small businesses on how to raise capital. You can reach him at anthony@LootScout.com
WBJ Web Partners
Most Recent
Most Recent
0 Comments