Internet Radio Show: 21st Century Entrepreneur | How to Manage A Growing Business | Aired Friday, February 20, 2015 at 12 NOON

By Posted on February 20th, 2015 0 Comments

This Friday February 20 we will be airing another episode of “21st Century Entrepreneur” which is an Internet radio program aimed towards educating business owners and their advisors on how to make their businesses more successful and profitable.  It is a show hosted by JC Maldonado who is the CEO of BizGro Partners, a Business Development Firm that helps small and midsize companies grow, expand, and transition.  This week we will discuss how to manage a growing business.  Our guest will be Leticia Rojas who is an experienced entrepreneur that built a Trucking Logistics Company to produce $14MM in revenues before selling her business recently.  Through her experiences, Leticia became skilled at managing a company that had over 50 employees and vehicles and was successful at procuring major government contracts as her major growth strategy.  We look forward to listening to her insight and wisdom on the show.

Below is a blog discussing a key capital raising strategy that is important to consider by all business leaders.  This blog is important in light of Leticia’s major growth strategy for her Trucking Company which was the procurement of government contracts.  Finally, last week, we interviewed Larry Sharp, founder and owner of the Neo-Sage Group, a Management Consulting Firm that provides training and coaching to entrepreneurs, executives, and top salespeople.  The topic we discussed was the differences between management and leadership in small business.  To hear a recorded version of this show, click on 21st Century Entrepreneur Archives.

 

If You Want to Raise Capital, Find a Good Deal

 

In 2008, our economy experienced the worst financial crisis since the great depression, leaving many small businesses fighting for their lives in an environment that saw consumer confidence and spending drop while capital became scarce.  Banks, Venture Capital Firms, Private Equity Firms, and Angel investors all became victims of the financial tsunami and have never recovered from the trauma.  The result: These entities simply do not serve the small and lower middle market business community like they once did.  Deals are few and far between even though many of these entities are now liquid and flush with capital to invest; rather, these entities are concentrating their focus on more substantial transactions in the corporate arena.  With that said, entrepreneurs often still make gallant efforts to procure monies from these entities, oftentimes asking for money to invest in product development, marketing, and other types of expansion plans that appear dubious and/or impractical.  Today, we would like to share one methodology of raising money from any entity you want.  It is the one strategy that can lead to a direct route to the capital you need for expansion. This strategy is simple.  Find a good deal.

WHAT DO YOU MEAN BY GOOD DEAL?

When we say find a good deal, we mean acquire a major customer, procure a substantial contractual bid, or buy an existing company that is complimentary to your book of business so that a lender and/or investor can measure how their monies will be returned with interest or dividends.  The problem in today’s environment is that many businesses want capital to expand, but have no real tangible way to assure investors and lenders that the plans being presented can come to fruition.  However, a deal involving a customer or business acquisition brings a tangible component to the expansion plan, considering it enables the lender or investor to seriously weigh out your projections in their analysis since your analysis is based on real world existing customers and real world sales and profits.  Further, projections associated with a business’s future, once a new major customer is procured or a business acquisition is made, are taken more seriously and have an aura of predictability for a lender or investor.

STOP TRYING TO RAISE MONEY TO GROW

Entrepreneurs should be a master at finding and making great deals.  When you make a deal, the money will follow.  As entrepreneurs, we need to stop trying to raise money before we find a good deal.  For example, if you win a contract to service a municipality in some way and the projected revenue for such a bid is $1MM resulting in projected profits of $300k, finding the money becomes simple.  You can procure purchase order financing, you may be able to cut a deal with a factor, you may be able to procure a line of credit from a bank or private lender, or you can simply procure a joint venture partner who will supply the labor, equipment, and resources to service the customer.  Conversely, finding money to make lucrative business acquisitions is not all that challenging if you find a great deal that can have positive impact on your company.  You can find an SBA lender, a private lending source, or a private investor who is willing to take an equity stake in your company to fund the transaction. Further, the procurement of a deal can also lead to the procurement of working capital if you need funds to further grow.  Bottom line: Deals give entrepreneurs credibility and the future looks a whole lot better from a lender or investor’s perspective when your growth strategy involves a great deal.

If you want more info on how to raise capital for growing businesses of all types contact us at askbgp@bizgropartners.com.

Please leave a Comment