The biggest entrepreneurial business lesson that I have learned from this recession is that the entrepreneur has to continue to work harder than the competition. Our hard work encompasses raising capital, marketing, sales, advertising, management, technology, and human resources if we are big enough to have employees. Of these areas of duty, raising capital has been challenging over the past two years and without capital we cannot carry out our remaining duties effectively.
The most efficient way to raise capital begins with documenting the successes you have achieved in your entrepreneurial venture(s). Update your business plan and gather your paper trail that documents the accomplishments of your business venture. This will show your lender your ability to execute your business strategy and accomplish your goals. Your accomplishments open a window into the future performance of your business and demonstrate how you are managing for success.
There are many factors to consider when deciding how to raise capital. You must consider where your business is now and where you see it going. Entrepreneurs have several sources for raising capital, such as:
- Sell your assets
- Borrow against your home
- Borrow against insurance policies
- SBA Lenders
- Asset base loans
- Term bank loans
- Private loans
- Royalty financing
As an entrepreneur that is having difficulty keeping up with payments there are alternatives to paying your bills late. Talk to your vendors and creditors. Try to renegotiate the terms of your payment schedule. If your terms are currently net 30 days, and you negotiate for net 60 days, the extension of those payables for 30 days equals free cash. When negotiating for extended terms be honest and upfront about why you need the extended terms. Above all else, when negotiating terms only make a deal that you can effectively honor.
Dealing with uncertainty while trying to forge ahead in times of change can be rough. It can be alleviated by focusing on the process instead of the end result. Start by investing in your employees. What can you do to help them do their very best? A little extra encouragement? or maybe a lengthened lunch break? Let us not forget to be focused on our mission. Above I suggested updating your business plan which should have included your mission statement. If our businesses are built upon our mission and we are focused on it we can maintain our drive and forge through these tough times.
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