How Entrepreneurs Can Find the Financing Help They Need

Posted on April 14, 2020 in Money & Finance, Planning & Advisors

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Don’€™t ask me where the past week has flown. It’€™s been a flurry of activity . . . and a flurry of comments on my post Why Women Entrepreneurs Don’€™t Get the Financing They Need. Seems it struck a bit of a nerve on all sides with some proponents in the “small-is-smart-not-weak” camp (and yes, I agree, expansion for its own sake isn’€™t necessarily good growth strategy) and others in the “yeah, you got me” camp who are feeling the fear and doing it anyway (great book by Susan Jeffers, if you haven’€™t read it). I’€™m just tickled that it has started a great discussion!

There are a few steps that it helps to follow. First step is to know how much money you need, why you need/want it, and how you intend to use it if you received it. If you haven’€™t done one before, this is where putting together a business plan can really help. Start to gather the financial information that you would need to complete one. Do you have a solid handle on your company’€™s finances? Are all of your P&Ls and balance sheets up to date? For that matter, have you reconciled all your bank statements? Do you know where your bank statements are? If all of your receipts and company documents are stored haphazardly on our computer or in a Henri Bendel’€™s bag, it’€™s time to bring in a bookkeeper to get this sorted out and systematized!  If you can’t handle your $10,000 budget and operations smoothly, will you be giving your lenders or investors the confidence that you can handle a $100,000 budget (and their money) well?

Second step is to familiarize yourself with the different kinds of financing. Our own Entrepreneur magazine website has a finance section with a lot of information. Also check out Rosalind Resnick’s Vest Pocket Consultant blog and Money Matters column. Michelle Anton’s Weekend Entrepreneur blog refers to Count-Me-In, which helps women-owned businesses get funding. And don’t forget Springboard, too! So you see, resource abound!

Third step is to network! No doubt you’€™ll know people who have gotten financing, or who would make great advisors. Ask about their experiences. Did they regret the path they took? What would they have done different? Asked for more money? Less? Chosen equity instead of debt, or vice versa? Did they give up too much control of the company for their liking? All of those things will help you get comfortable with the deal terms you want to achieve. They may also know of angel investment funds or bank representatives who “€œget it”.  They can also give you insight into what it’s like to manage a larger company once the funding comes in and how you can (or should) keep bankers or investors apprised of your progress.

Final step (for now) is to get a team of advisors on board. Whether it’€™s someone to look at your business plan, an accountant who can help you work out the numbers, an attorney who can help explain the legal responsibilities you’€™ll be taking on€“ this is a big step. Don’€™t feel you have to go it alone€“ and good luck!

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